Correlation Between Sao Ta and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both Sao Ta 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 Sao Ta and Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sao Ta Foods and Nafoods Group JSC, you can compare the effects of market volatilities on Sao Ta 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 Sao Ta with a short position of Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Ta and Nafoods Group.
Diversification Opportunities for Sao Ta and Nafoods Group
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sao and Nafoods is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sao Ta Foods 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 Sao Ta 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 Sao Ta Foods 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 Sao Ta i.e., Sao Ta and Nafoods Group go up and down completely randomly.
Pair Corralation between Sao Ta and Nafoods Group
Assuming the 90 days trading horizon Sao Ta Foods is expected to generate 0.44 times more return on investment than Nafoods Group. However, Sao Ta Foods is 2.27 times less risky than Nafoods Group. It trades about 0.23 of its potential returns per unit of risk. Nafoods Group JSC is currently generating about -0.04 per unit of risk. If you would invest 4,580,000 in Sao Ta Foods on September 1, 2024 and sell it today you would earn a total of 240,000 from holding Sao Ta Foods or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sao Ta Foods vs. Nafoods Group JSC
Performance |
| Timeline |
| Sao Ta Foods |
| Nafoods Group JSC |
Sao Ta and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sao Ta and Nafoods Group
The main advantage of trading using opposite Sao Ta and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sao Ta 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.| Sao Ta vs. BaoMinh Insurance Corp | Sao Ta vs. Dong Nai Plastic | Sao Ta vs. Ben Thanh Rubber | Sao Ta vs. Thong Nhat Rubber |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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