Correlation Between Matco Foods and Nimir Industrial

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

By analyzing existing cross correlation between Matco Foods and Nimir Industrial Chemical, you can compare the effects of market volatilities on Matco Foods and Nimir Industrial 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 Matco Foods with a short position of Nimir Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matco Foods and Nimir Industrial.

Diversification Opportunities for Matco Foods and Nimir Industrial

-0.07

Correlation Coefficient

Matco Foods  Nimir Industrial

Good diversification

The 3 months correlation between Matco and Nimir is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Matco Foods and Nimir Industrial Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nimir Industrial Chemical and Matco 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 Matco Foods are associated (or correlated) with Nimir Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nimir Industrial Chemical has no effect on the direction of Matco Foods i.e., Matco Foods and Nimir Industrial go up and down completely randomly.

Pair Corralation between Matco Foods and Nimir Industrial

Assuming the 90 days trading horizon Matco Foods is expected to under-perform the Nimir Industrial. In addition to that, Matco Foods is 1.34 times more volatile than Nimir Industrial Chemical. It trades about -0.07 of its total potential returns per unit of risk. Nimir Industrial Chemical is currently generating about -0.01 per unit of volatility. If you would invest  14,432  in Nimir Industrial Chemical on December 29, 2024 and sell it today you would lose (583.00) from holding Nimir Industrial Chemical or give up 4.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Matco Foods  vs.  Nimir Industrial Chemical

Matco Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matco Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Nimir Industrial Chemical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nimir Industrial Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nimir Industrial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Matco Foods and Nimir Industrial

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

The idea behind Matco Foods and Nimir Industrial Chemical 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.