Correlation Between Nomad Foods and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and Beyond Meat 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 Nomad Foods and Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and Beyond Meat, you can compare the effects of market volatilities on Nomad Foods and Beyond Meat 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 Nomad Foods with a short position of Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and Beyond Meat.
Diversification Opportunities for Nomad Foods and Beyond Meat
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nomad and Beyond is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat and Nomad 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 Nomad Foods are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Nomad Foods i.e., Nomad Foods and Beyond Meat go up and down completely randomly.
Pair Corralation between Nomad Foods and Beyond Meat
Given the investment horizon of 90 days Nomad Foods is expected to generate 0.38 times more return on investment than Beyond Meat. However, Nomad Foods is 2.65 times less risky than Beyond Meat. It trades about 0.1 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.2 per unit of risk. If you would invest 1,746 in Nomad Foods on August 30, 2024 and sell it today you would earn a total of 63.00 from holding Nomad Foods or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. Beyond Meat
Performance |
| Timeline |
| Nomad Foods |
| Beyond Meat |
Nomad Foods and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and Beyond Meat
The main advantage of trading using opposite Nomad Foods and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| Nomad Foods vs. Bunge Limited | Nomad Foods vs. Cal Maine Foods | Nomad Foods vs. Dole PLC | Nomad Foods vs. Adecoagro SA |
| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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