Correlation Between Nomad Foods and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and J+J SNACK 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 J+J SNACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and JJ SNACK FOODS, you can compare the effects of market volatilities on Nomad Foods and J+J SNACK 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 J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and J+J SNACK.
Diversification Opportunities for Nomad Foods and J+J SNACK
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nomad and J+J is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS 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 J+J SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of Nomad Foods i.e., Nomad Foods and J+J SNACK go up and down completely randomly.
Pair Corralation between Nomad Foods and J+J SNACK
Assuming the 90 days trading horizon Nomad Foods is expected to generate 1.0 times more return on investment than J+J SNACK. However, Nomad Foods is 1.0 times less risky than J+J SNACK. It trades about 0.14 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about -0.17 per unit of risk. If you would invest 1,525 in Nomad Foods on December 29, 2024 and sell it today you would earn a total of 275.00 from holding Nomad Foods or generate 18.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nomad Foods vs. JJ SNACK FOODS
Performance |
Timeline |
Nomad Foods |
JJ SNACK FOODS |
Nomad Foods and J+J SNACK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nomad Foods and J+J SNACK
The main advantage of trading using opposite Nomad Foods and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, J+J SNACK 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 J+J SNACK will offset losses from the drop in J+J SNACK's long position.Nomad Foods vs. 24SEVENOFFICE GROUP AB | Nomad Foods vs. Pets at Home | Nomad Foods vs. Haverty Furniture Companies | Nomad Foods vs. ECHO INVESTMENT ZY |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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