Correlation Between Binh Duong and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both Binh Duong and Nafoods Group 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 Binh Duong and Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Duong Construction and Nafoods Group JSC, you can compare the effects of market volatilities on Binh Duong and Nafoods Group 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 Binh Duong with a short position of Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Nafoods Group.
Diversification Opportunities for Binh Duong and Nafoods Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Binh and Nafoods is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Construction and Nafoods Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafoods Group JSC and Binh Duong 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 Binh Duong Construction are associated (or correlated) with Nafoods Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafoods Group JSC has no effect on the direction of Binh Duong i.e., Binh Duong and Nafoods Group go up and down completely randomly.
Pair Corralation between Binh Duong and Nafoods Group
Assuming the 90 days trading horizon Binh Duong Construction is expected to generate 0.83 times more return on investment than Nafoods Group. However, Binh Duong Construction is 1.2 times less risky than Nafoods Group. It trades about 0.5 of its potential returns per unit of risk. Nafoods Group JSC is currently generating about -0.18 per unit of risk. If you would invest 589,000 in Binh Duong Construction on September 3, 2024 and sell it today you would earn a total of 104,000 from holding Binh Duong Construction or generate 17.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binh Duong Construction vs. Nafoods Group JSC
Performance |
| Timeline |
| Binh Duong Construction |
| Nafoods Group JSC |
Binh Duong and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Nafoods Group
The main advantage of trading using opposite Binh Duong and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong position performs unexpectedly, Nafoods Group 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 Nafoods Group will offset losses from the drop in Nafoods Group's long position.| Binh Duong vs. Tng Investment And | Binh Duong vs. Elcom Technology Communications | Binh Duong vs. HVC Investment and | Binh Duong vs. Techno Agricultural Supplying |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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