Correlation Between Nafoods Group and Military Insurance
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Military Insurance 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 Military Insurance 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 Military Insurance Corp, you can compare the effects of market volatilities on Nafoods Group and Military Insurance 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 Military Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Military Insurance.
Diversification Opportunities for Nafoods Group and Military Insurance
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nafoods and Military is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Military Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Military Insurance Corp 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 Military Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Military Insurance Corp has no effect on the direction of Nafoods Group i.e., Nafoods Group and Military Insurance go up and down completely randomly.
Pair Corralation between Nafoods Group and Military Insurance
Assuming the 90 days trading horizon Nafoods Group JSC is expected to generate 1.05 times more return on investment than Military Insurance. However, Nafoods Group is 1.05 times more volatile than Military Insurance Corp. It trades about 0.05 of its potential returns per unit of risk. Military Insurance Corp is currently generating about -0.05 per unit of risk. If you would invest 1,709,091 in Nafoods Group JSC on August 28, 2024 and sell it today you would earn a total of 225,909 from holding Nafoods Group JSC or generate 13.22% 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. Military Insurance Corp
Performance |
| Timeline |
| Nafoods Group JSC |
| Military Insurance Corp |
Nafoods Group and Military Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Military Insurance
The main advantage of trading using opposite Nafoods Group and Military Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Military Insurance 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 Military Insurance will offset losses from the drop in Military Insurance'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 |
| Military Insurance vs. FIT INVEST JSC | Military Insurance vs. Damsan JSC | Military Insurance vs. An Phat Plastic | Military Insurance 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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