Correlation Between Nafoods Group and LDG Investment
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and LDG Investment 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 LDG Investment 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 LDG Investment JSC, you can compare the effects of market volatilities on Nafoods Group and LDG Investment 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 LDG Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and LDG Investment.
Diversification Opportunities for Nafoods Group and LDG Investment
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nafoods and LDG is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and LDG Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LDG Investment 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 LDG Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LDG Investment JSC has no effect on the direction of Nafoods Group i.e., Nafoods Group and LDG Investment go up and down completely randomly.
Pair Corralation between Nafoods Group and LDG Investment
Assuming the 90 days trading horizon Nafoods Group JSC is expected to under-perform the LDG Investment. In addition to that, Nafoods Group is 1.18 times more volatile than LDG Investment JSC. It trades about -0.14 of its total potential returns per unit of risk. LDG Investment JSC is currently generating about -0.06 per unit of volatility. If you would invest 190,000 in LDG Investment JSC on August 26, 2024 and sell it today you would lose (5,000) from holding LDG Investment JSC or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nafoods Group JSC vs. LDG Investment JSC
Performance |
| Timeline |
| Nafoods Group JSC |
| LDG Investment JSC |
Nafoods Group and LDG Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and LDG Investment
The main advantage of trading using opposite Nafoods Group and LDG Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, LDG Investment 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 LDG Investment will offset losses from the drop in LDG Investment's 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 |
| LDG Investment vs. FIT INVEST JSC | LDG Investment vs. Damsan JSC | LDG Investment vs. An Phat Plastic | LDG Investment 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |