Correlation Between NISSIN FOODS and Apple

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

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

Diversification Opportunities for NISSIN FOODS and Apple

0.1

Correlation Coefficient

NISSIN FOODS  Apple

Average diversification

The 3 months correlation between NISSIN and Apple is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and NISSIN 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 NISSIN FOODS HLDGS are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of NISSIN FOODS i.e., NISSIN FOODS and Apple go up and down completely randomly.

Pair Corralation between NISSIN FOODS and Apple

Assuming the 90 days trading horizon NISSIN FOODS HLDGS is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, NISSIN FOODS HLDGS is 1.02 times less risky than Apple. The stock trades about -0.28 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  22,371  in Apple Inc on November 29, 2024 and sell it today you would earn a total of  629.00  from holding Apple Inc or generate 2.81% return on investment over 90 days.

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

NISSIN FOODS HLDGS  vs.  Apple Inc

NISSIN FOODS HLDGS

Risk-Adjusted Performance

Very Weak

Over the last 90 days NISSIN FOODS HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Apple Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Apple is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with NISSIN FOODS and Apple

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

The idea behind NISSIN FOODS HLDGS and Apple 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.