Correlation Between NL Industries and Sligro Food
Can any of the company-specific risk be diversified away by investing in both NL Industries and Sligro Food 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 NL Industries and Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NL Industries and Sligro Food Group, you can compare the effects of market volatilities on NL Industries and Sligro Food 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 NL Industries with a short position of Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of NL Industries and Sligro Food.
Diversification Opportunities for NL Industries and Sligro Food
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NL Industries and Sligro is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NL Industries and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and NL Industries 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 NL Industries are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of NL Industries i.e., NL Industries and Sligro Food go up and down completely randomly.
Pair Corralation between NL Industries and Sligro Food
Allowing for the 90-day total investment horizon NL Industries is expected to generate 1.38 times more return on investment than Sligro Food. However, NL Industries is 1.38 times more volatile than Sligro Food Group. It trades about 0.06 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.1 per unit of risk. If you would invest 661.00 in NL Industries on September 3, 2024 and sell it today you would earn a total of 134.00 from holding NL Industries or generate 20.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
NL Industries vs. Sligro Food Group
Performance |
| Timeline |
| NL Industries |
| Sligro Food Group |
NL Industries and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NL Industries and Sligro Food
The main advantage of trading using opposite NL Industries and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NL Industries position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| NL Industries vs. Brinks Company | NL Industries vs. Allegion PLC | NL Industries vs. Resideo Technologies | NL Industries vs. Mistras Group |
| Sligro Food vs. Legacy Education | Sligro Food vs. Apple Inc | Sligro Food vs. NVIDIA | Sligro Food vs. Microsoft |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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