Correlation Between NISSIN FOODS and PREMIER FOODS

Can any of the company-specific risk be diversified away by investing in both NISSIN FOODS and PREMIER FOODS 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 PREMIER FOODS 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 PREMIER FOODS, you can compare the effects of market volatilities on NISSIN FOODS and PREMIER FOODS 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 PREMIER FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSIN FOODS and PREMIER FOODS.

Diversification Opportunities for NISSIN FOODS and PREMIER FOODS

0.14

Correlation Coefficient

NISSIN FOODS  PREMIER FOODS

Average diversification

The 3 months correlation between NISSIN and PREMIER is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and PREMIER FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PREMIER FOODS 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 PREMIER FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PREMIER FOODS has no effect on the direction of NISSIN FOODS i.e., NISSIN FOODS and PREMIER FOODS go up and down completely randomly.

Pair Corralation between NISSIN FOODS and PREMIER FOODS

Assuming the 90 days trading horizon NISSIN FOODS is expected to generate 1.37 times less return on investment than PREMIER FOODS. In addition to that, NISSIN FOODS is 1.26 times more volatile than PREMIER FOODS. It trades about 0.07 of its total potential returns per unit of risk. PREMIER FOODS is currently generating about 0.11 per unit of volatility. If you would invest  214.00  in PREMIER FOODS on September 3, 2024 and sell it today you would earn a total of  22.00  from holding PREMIER FOODS or generate 10.28% 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.  PREMIER FOODS

NISSIN FOODS HLDGS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NISSIN FOODS HLDGS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, NISSIN FOODS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PREMIER FOODS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PREMIER FOODS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, PREMIER FOODS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with NISSIN FOODS and PREMIER FOODS

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

The idea behind NISSIN FOODS HLDGS and PREMIER FOODS 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.