Correlation Between Nafoods Group and Pha Le
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Pha Le 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 Pha Le 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 Pha Le Plastics, you can compare the effects of market volatilities on Nafoods Group and Pha Le 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 Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Pha Le.
Diversification Opportunities for Nafoods Group and Pha Le
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nafoods and Pha is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics 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 Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of Nafoods Group i.e., Nafoods Group and Pha Le go up and down completely randomly.
Pair Corralation between Nafoods Group and Pha Le
Assuming the 90 days trading horizon Nafoods Group JSC is expected to generate 1.39 times more return on investment than Pha Le. However, Nafoods Group is 1.39 times more volatile than Pha Le Plastics. It trades about 0.05 of its potential returns per unit of risk. Pha Le Plastics is currently generating about 0.01 per unit of risk. If you would invest 1,713,636 in Nafoods Group JSC on October 30, 2024 and sell it today you would earn a total of 251,364 from holding Nafoods Group JSC or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
Nafoods Group JSC vs. Pha Le Plastics
Performance |
| Timeline |
| Nafoods Group JSC |
| Pha Le Plastics |
Nafoods Group and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Pha Le
The main advantage of trading using opposite Nafoods Group and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Pha Le 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 Pha Le will offset losses from the drop in Pha Le's long position.| Nafoods Group vs. Nam Kim Steel | Nafoods Group vs. Construction And Investment | Nafoods Group vs. BaoMinh Insurance Corp | Nafoods Group vs. Vina2 Investment and |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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