Correlation Between Hai An and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both Hai An 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 Hai An and Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hai An Transport and Nafoods Group JSC, you can compare the effects of market volatilities on Hai An 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 Hai An with a short position of Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hai An and Nafoods Group.
Diversification Opportunities for Hai An and Nafoods Group
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hai and Nafoods is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport 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 Hai An 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 Hai An Transport 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 Hai An i.e., Hai An and Nafoods Group go up and down completely randomly.
Pair Corralation between Hai An and Nafoods Group
Assuming the 90 days trading horizon Hai An Transport is expected to generate 2.92 times more return on investment than Nafoods Group. However, Hai An is 2.92 times more volatile than Nafoods Group JSC. It trades about 0.34 of its potential returns per unit of risk. Nafoods Group JSC is currently generating about 0.27 per unit of risk. If you would invest 4,840,000 in Hai An Transport on November 8, 2024 and sell it today you would earn a total of 570,000 from holding Hai An Transport or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hai An Transport vs. Nafoods Group JSC
Performance |
| Timeline |
| Hai An Transport |
| Nafoods Group JSC |
Hai An and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hai An and Nafoods Group
The main advantage of trading using opposite Hai An and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hai An 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.| Hai An vs. FIT INVEST JSC | Hai An vs. Damsan JSC | Hai An vs. An Phat Plastic | Hai An vs. APG Securities Joint |
| Nafoods Group vs. FIT INVEST JSC | Nafoods Group vs. Damsan JSC | Nafoods Group vs. An Phat Plastic | Nafoods Group vs. APG Securities Joint |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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