Correlation Between Nestle SA and Want Want
Can any of the company-specific risk be diversified away by investing in both Nestle SA and Want Want 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 Nestle SA and Want Want into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nestle SA and Want Want China, you can compare the effects of market volatilities on Nestle SA and Want Want 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 Nestle SA with a short position of Want Want. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nestle SA and Want Want.
Diversification Opportunities for Nestle SA and Want Want
Poor diversification
The 3 months correlation between Nestle and Want is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nestle SA and Want Want China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Want Want China and Nestle SA 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 Nestle SA are associated (or correlated) with Want Want. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Want Want China has no effect on the direction of Nestle SA i.e., Nestle SA and Want Want go up and down completely randomly.
Pair Corralation between Nestle SA and Want Want
If you would invest 55.00 in Want Want China on December 29, 2023 and sell it today you would earn a total of 0.00 from holding Want Want China or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
Nestle SA vs. Want Want China
Performance |
Timeline |
Nestle SA |
Want Want China |
Nestle SA and Want Want Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nestle SA and Want Want
The main advantage of trading using opposite Nestle SA and Want Want positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nestle SA position performs unexpectedly, Want Want 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 Want Want will offset losses from the drop in Want Want's long position.Nestle SA vs. Kraft Heinz Co | Nestle SA vs. General Mills | Nestle SA vs. Danone PK | Nestle SA vs. McCormick Company Incorporated |
Want Want vs. Kraft Heinz Co | Want Want vs. General Mills | Want Want vs. Danone PK | Want Want vs. McCormick Company Incorporated |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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