Correlation Between Nafoods Group and Duc Thanh
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Duc Thanh 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 Duc Thanh 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 Duc Thanh Wood, you can compare the effects of market volatilities on Nafoods Group and Duc Thanh 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 Duc Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Duc Thanh.
Diversification Opportunities for Nafoods Group and Duc Thanh
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nafoods and Duc is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Duc Thanh Wood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duc Thanh Wood 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 Duc Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duc Thanh Wood has no effect on the direction of Nafoods Group i.e., Nafoods Group and Duc Thanh go up and down completely randomly.
Pair Corralation between Nafoods Group and Duc Thanh
Assuming the 90 days trading horizon Nafoods Group JSC is expected to generate 1.36 times more return on investment than Duc Thanh. However, Nafoods Group is 1.36 times more volatile than Duc Thanh Wood. It trades about 0.08 of its potential returns per unit of risk. Duc Thanh Wood is currently generating about 0.07 per unit of risk. If you would invest 1,327,273 in Nafoods Group JSC on September 1, 2024 and sell it today you would earn a total of 687,727 from holding Nafoods Group JSC or generate 51.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nafoods Group JSC vs. Duc Thanh Wood
Performance |
| Timeline |
| Nafoods Group JSC |
| Duc Thanh Wood |
Nafoods Group and Duc Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Duc Thanh
The main advantage of trading using opposite Nafoods Group and Duc Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Duc Thanh 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 Duc Thanh will offset losses from the drop in Duc Thanh's long position.| Nafoods Group vs. FIT INVEST JSC | Nafoods Group vs. Damsan JSC | Nafoods Group vs. An Phat Plastic | Nafoods Group vs. Alphanam ME |
| Duc Thanh vs. FIT INVEST JSC | Duc Thanh vs. Damsan JSC | Duc Thanh vs. An Phat Plastic | Duc Thanh vs. Alphanam ME |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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