Correlation Between Nafoods Group and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Nafoods Group and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Dow Jones.
Diversification Opportunities for Nafoods Group and Dow Jones
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nafoods and Dow is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Nafoods Group i.e., Nafoods Group and Dow Jones go up and down completely randomly.
Pair Corralation between Nafoods Group and Dow Jones
Assuming the 90 days trading horizon Nafoods Group JSC is expected to generate 2.89 times more return on investment than Dow Jones. However, Nafoods Group is 2.89 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 809,091 in Nafoods Group JSC on August 29, 2024 and sell it today you would earn a total of 1,210,909 from holding Nafoods Group JSC or generate 149.66% 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. Dow Jones Industrial
Performance |
| Timeline |
Nafoods Group and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Nafoods Group JSC
Pair trading matchups for Nafoods Group
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Nafoods Group and Dow Jones
The main advantage of trading using opposite Nafoods Group and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Nafoods Group vs. FIT INVEST JSC | Nafoods Group vs. Damsan JSC | Nafoods Group vs. An Phat Plastic | Nafoods Group vs. Alphanam ME |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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