Correlation Between Nomad Foods and CVW CLEANTECH

Can any of the company-specific risk be diversified away by investing in both Nomad Foods and CVW CLEANTECH 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 CVW CLEANTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nomad Foods and CVW CLEANTECH INC, you can compare the effects of market volatilities on Nomad Foods and CVW CLEANTECH 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 CVW CLEANTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and CVW CLEANTECH.

Diversification Opportunities for Nomad Foods and CVW CLEANTECH

0.2

Correlation Coefficient

Nomad Foods  CVW CLEANTECH

Modest diversification

The 3 months correlation between Nomad and CVW is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and CVW CLEANTECH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CLEANTECH INC 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 CVW CLEANTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CLEANTECH INC has no effect on the direction of Nomad Foods i.e., Nomad Foods and CVW CLEANTECH go up and down completely randomly.

Pair Corralation between Nomad Foods and CVW CLEANTECH

Assuming the 90 days trading horizon Nomad Foods is expected to generate 6.3 times less return on investment than CVW CLEANTECH. But when comparing it to its historical volatility, Nomad Foods is 1.57 times less risky than CVW CLEANTECH. It trades about 0.01 of its potential returns per unit of risk. CVW CLEANTECH INC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  56.00  in CVW CLEANTECH INC on October 12, 2024 and sell it today you would earn a total of  3.00  from holding CVW CLEANTECH INC or generate 5.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nomad Foods  vs.  CVW CLEANTECH INC

Nomad Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nomad Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nomad Foods is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

CVW CLEANTECH INC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CVW CLEANTECH INC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, CVW CLEANTECH may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nomad Foods and CVW CLEANTECH

The main advantage of trading using opposite Nomad Foods and CVW CLEANTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, CVW CLEANTECH 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 CVW CLEANTECH will offset losses from the drop in CVW CLEANTECH's long position.

The idea behind Nomad Foods and CVW CLEANTECH INC 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.