Correlation Between Nisun International and Premium Catering

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

By analyzing existing cross correlation between Nisun International Enterprise and Premium Catering Limited, you can compare the effects of market volatilities on Nisun International and Premium Catering 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 Nisun International with a short position of Premium Catering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nisun International and Premium Catering.

Diversification Opportunities for Nisun International and Premium Catering

0.69

Correlation Coefficient

Nisun International  Premium Catering

Poor diversification

The 3 months correlation between Nisun and Premium is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nisun International Enterprise and Premium Catering Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Catering and Nisun International 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 Nisun International Enterprise are associated (or correlated) with Premium Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Catering has no effect on the direction of Nisun International i.e., Nisun International and Premium Catering go up and down completely randomly.

Pair Corralation between Nisun International and Premium Catering

Given the investment horizon of 90 days Nisun International Enterprise is expected to generate 0.59 times more return on investment than Premium Catering. However, Nisun International Enterprise is 1.68 times less risky than Premium Catering. It trades about -0.15 of its potential returns per unit of risk. Premium Catering Limited is currently generating about -0.1 per unit of risk. If you would invest  1,419  in Nisun International Enterprise on September 18, 2024 and sell it today you would lose (875.00) from holding Nisun International Enterprise or give up 61.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.06%
Values	Daily Returns

Nisun International Enterprise  vs.  Premium Catering Limited

Nisun International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nisun International Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Premium Catering

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nisun International and Premium Catering

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

The idea behind Nisun International Enterprise and Premium Catering Limited 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 Global Correlations module to find global opportunities by holding instruments from different markets.