Correlation Between 3M and Element Nutritional
Can any of the company-specific risk be diversified away by investing in both 3M and Element Nutritional 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 3M and Element Nutritional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Element Nutritional Sciences, you can compare the effects of market volatilities on 3M and Element Nutritional 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 3M with a short position of Element Nutritional. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Element Nutritional.
Diversification Opportunities for 3M and Element Nutritional
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 3M and Element is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Element Nutritional Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Nutritional and 3M 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 3M Company are associated (or correlated) with Element Nutritional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Nutritional has no effect on the direction of 3M i.e., 3M and Element Nutritional go up and down completely randomly.
Pair Corralation between 3M and Element Nutritional
If you would invest 12,954 in 3M Company on December 27, 2024 and sell it today you would earn a total of 2,314 from holding 3M Company or generate 17.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
3M Company vs. Element Nutritional Sciences
Performance |
Timeline |
3M Company |
Element Nutritional |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
3M and Element Nutritional Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 3M and Element Nutritional
The main advantage of trading using opposite 3M and Element Nutritional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Element Nutritional 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 Element Nutritional will offset losses from the drop in Element Nutritional's long position.3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
Element Nutritional vs. Premier Foods Plc | Element Nutritional vs. Torque Lifestyle Brands | Element Nutritional vs. Naturally Splendid Enterprises | Element Nutritional vs. Aryzta AG PK |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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