Correlation Between Mirion Technologies and Nordson

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

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

Diversification Opportunities for Mirion Technologies and Nordson

-0.51

Correlation Coefficient

Mirion Technologies  Nordson

Excellent diversification

The 3 months correlation between Mirion and Nordson is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mirion Technologies and Nordson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordson and Mirion Technologies 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 Mirion Technologies are associated (or correlated) with Nordson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordson has no effect on the direction of Mirion Technologies i.e., Mirion Technologies and Nordson go up and down completely randomly.

Pair Corralation between Mirion Technologies and Nordson

Considering the 90-day investment horizon Mirion Technologies is expected to generate 1.56 times more return on investment than Nordson. However, Mirion Technologies is 1.56 times more volatile than Nordson. It trades about 0.09 of its potential returns per unit of risk. Nordson is currently generating about -0.01 per unit of risk. If you would invest  684.00  in Mirion Technologies on September 29, 2024 and sell it today you would earn a total of  1,078  from holding Mirion Technologies or generate 157.6% return on investment over 90 days.

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

Mirion Technologies  vs.  Nordson

Mirion Technologies

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mirion Technologies are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Mirion Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Nordson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordson has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Mirion Technologies and Nordson

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

The idea behind Mirion Technologies and Nordson 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.