Correlation Between Nicoccino Holding and Online Brands

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

By analyzing existing cross correlation between Nicoccino Holding AB and Online Brands Nordic, you can compare the effects of market volatilities on Nicoccino Holding and Online Brands 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 Nicoccino Holding with a short position of Online Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicoccino Holding and Online Brands.

Diversification Opportunities for Nicoccino Holding and Online Brands

-0.12

Correlation Coefficient

Nicoccino Holding  Online Brands

Good diversification

The 3 months correlation between Nicoccino and Online is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nicoccino Holding AB and Online Brands Nordic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Online Brands Nordic and Nicoccino Holding 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 Nicoccino Holding AB are associated (or correlated) with Online Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Online Brands Nordic has no effect on the direction of Nicoccino Holding i.e., Nicoccino Holding and Online Brands go up and down completely randomly.

Pair Corralation between Nicoccino Holding and Online Brands

Assuming the 90 days trading horizon Nicoccino Holding AB is expected to generate 5.51 times more return on investment than Online Brands. However, Nicoccino Holding is 5.51 times more volatile than Online Brands Nordic. It trades about 0.11 of its potential returns per unit of risk. Online Brands Nordic is currently generating about -0.06 per unit of risk. If you would invest  134.00  in Nicoccino Holding AB on December 29, 2024 and sell it today you would earn a total of  66.00  from holding Nicoccino Holding AB or generate 49.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Nicoccino Holding AB  vs.  Online Brands Nordic

Nicoccino Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nicoccino Holding AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nicoccino Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Online Brands Nordic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Online Brands Nordic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Nicoccino Holding and Online Brands

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

The idea behind Nicoccino Holding AB and Online Brands Nordic 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.