Correlation Between Vietnam Airlines and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both Vietnam Airlines 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 Vietnam Airlines and Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Airlines JSC and Nafoods Group JSC, you can compare the effects of market volatilities on Vietnam Airlines 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 Vietnam Airlines with a short position of Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Airlines and Nafoods Group.
Diversification Opportunities for Vietnam Airlines and Nafoods Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vietnam and Nafoods is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Airlines JSC 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 Vietnam Airlines 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 Vietnam Airlines JSC 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 Vietnam Airlines i.e., Vietnam Airlines and Nafoods Group go up and down completely randomly.
Pair Corralation between Vietnam Airlines and Nafoods Group
Assuming the 90 days trading horizon Vietnam Airlines is expected to generate 1.08 times less return on investment than Nafoods Group. In addition to that, Vietnam Airlines is 1.41 times more volatile than Nafoods Group JSC. It trades about 0.06 of its total potential returns per unit of risk. Nafoods Group JSC is currently generating about 0.09 per unit of volatility. If you would invest 936,364 in Nafoods Group JSC on August 31, 2024 and sell it today you would earn a total of 1,078,636 from holding Nafoods Group JSC or generate 115.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Airlines JSC vs. Nafoods Group JSC
Performance |
| Timeline |
| Vietnam Airlines JSC |
| Nafoods Group JSC |
Vietnam Airlines and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Airlines and Nafoods Group
The main advantage of trading using opposite Vietnam Airlines and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Airlines 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.| Vietnam Airlines vs. Song Hong Garment | Vietnam Airlines vs. Alphanam ME | Vietnam Airlines vs. Hochiminh City Metal | Vietnam Airlines vs. Atesco Industrial Cartering |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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