Correlation Between Nafoods Group and Vietnam Technological
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Vietnam Technological 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 Vietnam Technological 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 Vietnam Technological And, you can compare the effects of market volatilities on Nafoods Group and Vietnam Technological 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 Vietnam Technological. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Vietnam Technological.
Diversification Opportunities for Nafoods Group and Vietnam Technological
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nafoods and Vietnam is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Vietnam Technological And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Technological And 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 Vietnam Technological. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Technological And has no effect on the direction of Nafoods Group i.e., Nafoods Group and Vietnam Technological go up and down completely randomly.
Pair Corralation between Nafoods Group and Vietnam Technological
Assuming the 90 days trading horizon Nafoods Group JSC is expected to under-perform the Vietnam Technological. But the stock apears to be less risky and, when comparing its historical volatility, Nafoods Group JSC is 1.05 times less risky than Vietnam Technological. The stock trades about -0.09 of its potential returns per unit of risk. The Vietnam Technological And is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 2,430,000 in Vietnam Technological And on October 17, 2024 and sell it today you would lose (60,000) from holding Vietnam Technological And or give up 2.47% 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. Vietnam Technological And
Performance |
| Timeline |
| Nafoods Group JSC |
| Vietnam Technological And |
Nafoods Group and Vietnam Technological Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Vietnam Technological
The main advantage of trading using opposite Nafoods Group and Vietnam Technological positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Vietnam Technological 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 Vietnam Technological will offset losses from the drop in Vietnam Technological's long position.| Nafoods Group vs. Vnsteel Vicasa JSC | Nafoods Group vs. Saigon Telecommunication Technologies | Nafoods Group vs. Nam Kim Steel | Nafoods Group vs. Saigon Beer Alcohol |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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