Correlation Between Nissin Foods and China Feihe
Can any of the company-specific risk be diversified away by investing in both Nissin Foods and China Feihe 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 Nissin Foods and China Feihe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nissin Foods Holdings and China Feihe Limited, you can compare the effects of market volatilities on Nissin Foods and China Feihe 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 Nissin Foods with a short position of China Feihe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nissin Foods and China Feihe.
Diversification Opportunities for Nissin Foods and China Feihe
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nissin and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nissin Foods Holdings and China Feihe Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Feihe Limited and Nissin 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 Nissin Foods Holdings are associated (or correlated) with China Feihe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Feihe Limited has no effect on the direction of Nissin Foods i.e., Nissin Foods and China Feihe go up and down completely randomly.
Pair Corralation between Nissin Foods and China Feihe
Assuming the 90 days horizon Nissin Foods Holdings is expected to generate 0.91 times more return on investment than China Feihe. However, Nissin Foods Holdings is 1.1 times less risky than China Feihe. It trades about -0.04 of its potential returns per unit of risk. China Feihe Limited is currently generating about -0.04 per unit of risk. If you would invest 1,980 in Nissin Foods Holdings on September 7, 2025 and sell it today you would lose (121.00) from holding Nissin Foods Holdings or give up 6.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nissin Foods Holdings vs. China Feihe Limited
Performance |
| Timeline |
| Nissin Foods Holdings |
| China Feihe Limited |
Nissin Foods and China Feihe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nissin Foods and China Feihe
The main advantage of trading using opposite Nissin Foods and China Feihe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nissin Foods position performs unexpectedly, China Feihe 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 China Feihe will offset losses from the drop in China Feihe's long position.| Nissin Foods vs. Danone PK | Nissin Foods vs. Danone SA | Nissin Foods vs. Kraft Heinz Co | Nissin Foods vs. Kellanova |
| China Feihe vs. Mitsubishi UFJ Lease | China Feihe vs. Technology Telecommunication Acquisition | China Feihe vs. Mitsui Chemicals ADR | China Feihe vs. Lend Lease Group |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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