Correlation Between CHAOSUA FOODS and NSL Foods
Can any of the company-specific risk be diversified away by investing in both CHAOSUA FOODS and NSL Foods 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 CHAOSUA FOODS and NSL Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHAOSUA FOODS INDUSTRY and NSL Foods Public, you can compare the effects of market volatilities on CHAOSUA FOODS and NSL Foods 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 CHAOSUA FOODS with a short position of NSL Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHAOSUA FOODS and NSL Foods.
Diversification Opportunities for CHAOSUA FOODS and NSL Foods
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHAOSUA and NSL is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CHAOSUA FOODS INDUSTRY and NSL Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSL Foods Public and CHAOSUA 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 CHAOSUA FOODS INDUSTRY are associated (or correlated) with NSL Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSL Foods Public has no effect on the direction of CHAOSUA FOODS i.e., CHAOSUA FOODS and NSL Foods go up and down completely randomly.
Pair Corralation between CHAOSUA FOODS and NSL Foods
Assuming the 90 days trading horizon CHAOSUA FOODS INDUSTRY is expected to under-perform the NSL Foods. In addition to that, CHAOSUA FOODS is 1.39 times more volatile than NSL Foods Public. It trades about -0.17 of its total potential returns per unit of risk. NSL Foods Public is currently generating about 0.05 per unit of volatility. If you would invest 2,091 in NSL Foods Public on August 24, 2024 and sell it today you would earn a total of 1,059 from holding NSL Foods Public or generate 50.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 19.54% |
| Values | Daily Returns |
CHAOSUA FOODS INDUSTRY vs. NSL Foods Public
Performance |
| Timeline |
| CHAOSUA FOODS INDUSTRY |
| NSL Foods Public |
CHAOSUA FOODS and NSL Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHAOSUA FOODS and NSL Foods
The main advantage of trading using opposite CHAOSUA FOODS and NSL Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHAOSUA FOODS position performs unexpectedly, NSL Foods 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 NSL Foods will offset losses from the drop in NSL Foods' long position.| CHAOSUA FOODS vs. Delta Electronics Public | CHAOSUA FOODS vs. Delta Electronics Public | CHAOSUA FOODS vs. Airports of Thailand | CHAOSUA FOODS vs. Airports of Thailand |
| NSL Foods vs. Chamni Eye PCL | NSL Foods vs. Siam Global House | NSL Foods vs. The Erawan Group | NSL Foods vs. Ditto Public |
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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