Correlation Between NSI NV and Sligro Food

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

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

Diversification Opportunities for NSI NV and Sligro Food

0.03

Correlation Coefficient

NSI NV  Sligro Food

Significant diversification

The 3 months correlation between NSI and Sligro is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding NSI NV and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and NSI NV 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 NSI NV are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of NSI NV i.e., NSI NV and Sligro Food go up and down completely randomly.

Pair Corralation between NSI NV and Sligro Food

Assuming the 90 days trading horizon NSI NV is expected to generate 0.96 times more return on investment than Sligro Food. However, NSI NV is 1.04 times less risky than Sligro Food. It trades about 0.14 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.03 per unit of risk. If you would invest  1,902  in NSI NV on December 30, 2024 and sell it today you would earn a total of  278.00  from holding NSI NV or generate 14.62% return on investment over 90 days.

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

NSI NV  vs.  Sligro Food Group

NSI NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NSI NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, NSI NV unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sligro Food Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sligro Food is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NSI NV and Sligro Food

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

The idea behind NSI NV and Sligro Food Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.