Correlation Between Sligro Food and NSI NV

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

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

Diversification Opportunities for Sligro Food and NSI NV

0.03

Correlation Coefficient

Sligro Food  NSI NV

Significant diversification

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

Pair Corralation between Sligro Food and NSI NV

Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the NSI NV. In addition to that, Sligro Food is 1.04 times more volatile than NSI NV. It trades about -0.03 of its total potential returns per unit of risk. NSI NV is currently generating about 0.14 per unit of volatility. 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

Sligro Food Group  vs.  NSI NV

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.

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.

Pair Trading with Sligro Food and NSI NV

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

The idea behind Sligro Food Group and NSI NV 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.