Correlation Between Nafoods Group and Saigon Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Saigon Telecommunicatio 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 Saigon Telecommunicatio 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 Saigon Telecommunication Technologies, you can compare the effects of market volatilities on Nafoods Group and Saigon Telecommunicatio 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 Saigon Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Saigon Telecommunicatio.
Diversification Opportunities for Nafoods Group and Saigon Telecommunicatio
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nafoods and Saigon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio 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 Saigon Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Telecommunicatio has no effect on the direction of Nafoods Group i.e., Nafoods Group and Saigon Telecommunicatio go up and down completely randomly.
Pair Corralation between Nafoods Group and Saigon Telecommunicatio
Assuming the 90 days trading horizon Nafoods Group JSC is expected to under-perform the Saigon Telecommunicatio. In addition to that, Nafoods Group is 1.21 times more volatile than Saigon Telecommunication Technologies. It trades about -0.14 of its total potential returns per unit of risk. Saigon Telecommunication Technologies is currently generating about -0.07 per unit of volatility. If you would invest 1,510,000 in Saigon Telecommunication Technologies on August 26, 2024 and sell it today you would lose (45,000) from holding Saigon Telecommunication Technologies or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nafoods Group JSC vs. Saigon Telecommunication Techn
Performance |
| Timeline |
| Nafoods Group JSC |
| Saigon Telecommunicatio |
Nafoods Group and Saigon Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Saigon Telecommunicatio
The main advantage of trading using opposite Nafoods Group and Saigon Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Saigon Telecommunicatio 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 Saigon Telecommunicatio will offset losses from the drop in Saigon Telecommunicatio'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 |
| Saigon Telecommunicatio vs. FIT INVEST JSC | Saigon Telecommunicatio vs. Damsan JSC | Saigon Telecommunicatio vs. An Phat Plastic | Saigon Telecommunicatio 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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