Correlation Between Leroy Seafood and Nestle SA
Can any of the company-specific risk be diversified away by investing in both Leroy Seafood and Nestle SA 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 Leroy Seafood and Nestle SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leroy Seafood Group and Nestle SA, you can compare the effects of market volatilities on Leroy Seafood and Nestle SA 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 Leroy Seafood with a short position of Nestle SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leroy Seafood and Nestle SA.
Diversification Opportunities for Leroy Seafood and Nestle SA
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leroy and Nestle is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Leroy Seafood Group and Nestle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nestle SA and Leroy Seafood 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 Leroy Seafood Group are associated (or correlated) with Nestle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nestle SA has no effect on the direction of Leroy Seafood i.e., Leroy Seafood and Nestle SA go up and down completely randomly.
Pair Corralation between Leroy Seafood and Nestle SA
If you would invest (100.00) in Leroy Seafood Group on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Leroy Seafood Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Leroy Seafood Group vs. Nestle SA
Performance |
| Timeline |
| Leroy Seafood Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Nestle SA |
Leroy Seafood and Nestle SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leroy Seafood and Nestle SA
The main advantage of trading using opposite Leroy Seafood and Nestle SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leroy Seafood position performs unexpectedly, Nestle SA 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 Nestle SA will offset losses from the drop in Nestle SA's long position.| Leroy Seafood vs. Hudson Technologies | Leroy Seafood vs. Flexible Solutions International | Leroy Seafood vs. Chester Mining | Leroy Seafood vs. Hurco Companies |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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