Correlation Between NH Foods and XChange TECINC
Can any of the company-specific risk be diversified away by investing in both NH Foods and XChange TECINC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NH Foods and XChange TECINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods Ltd and XChange TECINC, you can compare the effects of market volatilities on NH Foods and XChange TECINC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NH Foods with a short position of XChange TECINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and XChange TECINC.
Diversification Opportunities for NH Foods and XChange TECINC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIPMY and XChange is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd and XChange TECINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XChange TECINC and NH Foods is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NH Foods Ltd are associated (or correlated) with XChange TECINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XChange TECINC has no effect on the direction of NH Foods i.e., NH Foods and XChange TECINC go up and down completely randomly.
Pair Corralation between NH Foods and XChange TECINC
Assuming the 90 days horizon NH Foods Ltd is expected to generate 0.04 times more return on investment than XChange TECINC. However, NH Foods Ltd is 26.96 times less risky than XChange TECINC. It trades about 0.09 of its potential returns per unit of risk. XChange TECINC is currently generating about -0.03 per unit of risk. If you would invest 1,330 in NH Foods Ltd on September 12, 2024 and sell it today you would earn a total of 370.00 from holding NH Foods Ltd or generate 27.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NH Foods Ltd vs. XChange TECINC
Performance |
| Timeline |
| NH Foods |
| XChange TECINC |
NH Foods and XChange TECINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and XChange TECINC
The main advantage of trading using opposite NH Foods and XChange TECINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods position performs unexpectedly, XChange TECINC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in XChange TECINC will offset losses from the drop in XChange TECINC's long position.The idea behind NH Foods Ltd and XChange TECINC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| XChange TECINC vs. FitLife Brands, Common | XChange TECINC vs. AMCON Distributing | XChange TECINC vs. Bridgford Foods | XChange TECINC vs. NH Foods Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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