Correlation Between NH Foods and Electronics For

Can any of the company-specific risk be diversified away by investing in both NH Foods and Electronics For 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 NH Foods and Electronics For into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NH Foods Ltd and Electronics For Imaging, you can compare the effects of market volatilities on NH Foods and Electronics For 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 NH Foods with a short position of Electronics For. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and Electronics For.

Diversification Opportunities for NH Foods and Electronics For

0.0

Correlation Coefficient

NH Foods  Electronics For

Pay attention - limited upside

The 3 months correlation between NIPMY and Electronics is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd and Electronics For Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics For Imaging and NH Foods 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 NH Foods Ltd are associated (or correlated) with Electronics For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics For Imaging has no effect on the direction of NH Foods i.e., NH Foods and Electronics For go up and down completely randomly.

Pair Corralation between NH Foods and Electronics For

If you would invest  1,510  in NH Foods Ltd on February 6, 2024 and sell it today you would earn a total of  115.00  from holding NH Foods Ltd or generate 7.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NH Foods Ltd  vs.  Electronics For Imaging

NH Foods

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NH Foods Ltd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, NH Foods may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Electronics For Imaging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Electronics For Imaging has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Electronics For is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with NH Foods and Electronics For

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

The idea behind NH Foods Ltd and Electronics For Imaging 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.