Correlation Between Com7 PCL and NSL Foods
Can any of the company-specific risk be diversified away by investing in both Com7 PCL 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 Com7 PCL and NSL Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and NSL Foods Public, you can compare the effects of market volatilities on Com7 PCL 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 Com7 PCL with a short position of NSL Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and NSL Foods.
Diversification Opportunities for Com7 PCL and NSL Foods
Good diversification
The 3 months correlation between Com7 and NSL is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL 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 Com7 PCL 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 Com7 PCL 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 Com7 PCL i.e., Com7 PCL and NSL Foods go up and down completely randomly.
Pair Corralation between Com7 PCL and NSL Foods
Assuming the 90 days trading horizon Com7 PCL is expected to under-perform the NSL Foods. In addition to that, Com7 PCL is 1.03 times more volatile than NSL Foods Public. It trades about 0.0 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 2,081 in NSL Foods Public on September 2, 2024 and sell it today you would earn a total of 1,144 from holding NSL Foods Public or generate 54.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Com7 PCL vs. NSL Foods Public
Performance |
| Timeline |
| Com7 PCL |
| NSL Foods Public |
Com7 PCL and NSL Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and NSL Foods
The main advantage of trading using opposite Com7 PCL and NSL Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL 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.| Com7 PCL vs. CP ALL Public | Com7 PCL vs. Home Product Center | Com7 PCL vs. Minor International Public | Com7 PCL vs. Bangkok Dusit Medical |
| NSL Foods vs. Mega Lifesciences Public | NSL Foods vs. Com7 PCL | NSL Foods vs. Thai Union Group | NSL Foods vs. Jay Mart 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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