Correlation Between Nates Food and Tigo Energy

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

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

Diversification Opportunities for Nates Food and Tigo Energy

0.02

Correlation Coefficient

Nates Food  Tigo Energy

Significant diversification

The 3 months correlation between Nates and Tigo is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nates Food Co and Tigo Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tigo Energy and Nates Food 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 Nates Food Co are associated (or correlated) with Tigo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tigo Energy has no effect on the direction of Nates Food i.e., Nates Food and Tigo Energy go up and down completely randomly.

Pair Corralation between Nates Food and Tigo Energy

Given the investment horizon of 90 days Nates Food Co is expected to generate 49.49 times more return on investment than Tigo Energy. However, Nates Food is 49.49 times more volatile than Tigo Energy. It trades about 0.23 of its potential returns per unit of risk. Tigo Energy is currently generating about 0.02 per unit of risk. If you would invest  0.00  in Nates Food Co on December 19, 2024 and sell it today you would earn a total of  0.01  from holding Nates Food Co or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.14%
Values	Daily Returns

Nates Food Co  vs.  Tigo Energy

Nates Food

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nates Food Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, Nates Food exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tigo Energy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tigo Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Tigo Energy is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nates Food and Tigo Energy

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

The idea behind Nates Food Co and Tigo Energy 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.