Correlation Between Nafoods Group and Ba Ria
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Ba Ria 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 Nafoods Group and Ba Ria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nafoods Group JSC and Ba Ria Thermal, you can compare the effects of market volatilities on Nafoods Group and Ba Ria 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 Nafoods Group with a short position of Ba Ria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Ba Ria.
Diversification Opportunities for Nafoods Group and Ba Ria
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nafoods and BTP is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Ba Ria Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ba Ria Thermal and Nafoods Group 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 Nafoods Group JSC are associated (or correlated) with Ba Ria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ba Ria Thermal has no effect on the direction of Nafoods Group i.e., Nafoods Group and Ba Ria go up and down completely randomly.
Pair Corralation between Nafoods Group and Ba Ria
Assuming the 90 days trading horizon Nafoods Group JSC is expected to generate 1.26 times more return on investment than Ba Ria. However, Nafoods Group is 1.26 times more volatile than Ba Ria Thermal. It trades about 0.1 of its potential returns per unit of risk. Ba Ria Thermal is currently generating about 0.02 per unit of risk. If you would invest 800,000 in Nafoods Group JSC on August 28, 2024 and sell it today you would earn a total of 1,135,000 from holding Nafoods Group JSC or generate 141.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Nafoods Group JSC vs. Ba Ria Thermal
Performance |
| Timeline |
| Nafoods Group JSC |
| Ba Ria Thermal |
Nafoods Group and Ba Ria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Ba Ria
The main advantage of trading using opposite Nafoods Group and Ba Ria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Ba Ria 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 Ba Ria will offset losses from the drop in Ba Ria's long position.| Nafoods Group vs. Dong A Hotel | Nafoods Group vs. Riverway Management JSC | Nafoods Group vs. Danang Education Investment | Nafoods Group vs. Global Electrical Technology |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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