Correlation Between Nafoods Group and Telecoms Informatics
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Telecoms Informatics 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 Telecoms Informatics 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 Telecoms Informatics JSC, you can compare the effects of market volatilities on Nafoods Group and Telecoms Informatics 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 Telecoms Informatics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Telecoms Informatics.
Diversification Opportunities for Nafoods Group and Telecoms Informatics
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nafoods and Telecoms is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Telecoms Informatics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecoms Informatics JSC 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 Telecoms Informatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecoms Informatics JSC has no effect on the direction of Nafoods Group i.e., Nafoods Group and Telecoms Informatics go up and down completely randomly.
Pair Corralation between Nafoods Group and Telecoms Informatics
Assuming the 90 days trading horizon Nafoods Group JSC is expected to under-perform the Telecoms Informatics. But the stock apears to be less risky and, when comparing its historical volatility, Nafoods Group JSC is 1.37 times less risky than Telecoms Informatics. The stock trades about -0.11 of its potential returns per unit of risk. The Telecoms Informatics JSC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,250,000 in Telecoms Informatics JSC on August 29, 2024 and sell it today you would earn a total of 30,000 from holding Telecoms Informatics JSC or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nafoods Group JSC vs. Telecoms Informatics JSC
Performance |
| Timeline |
| Nafoods Group JSC |
| Telecoms Informatics JSC |
Nafoods Group and Telecoms Informatics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Telecoms Informatics
The main advantage of trading using opposite Nafoods Group and Telecoms Informatics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Telecoms Informatics 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 Telecoms Informatics will offset losses from the drop in Telecoms Informatics' long position.| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |