Correlation Between Nafoods Group and Vietnam Dairy
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Vietnam Dairy 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 Dairy 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 Dairy Products, you can compare the effects of market volatilities on Nafoods Group and Vietnam Dairy 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 Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Vietnam Dairy.
Diversification Opportunities for Nafoods Group and Vietnam Dairy
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nafoods and Vietnam is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Vietnam Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Dairy Products 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 Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Dairy Products has no effect on the direction of Nafoods Group i.e., Nafoods Group and Vietnam Dairy go up and down completely randomly.
Pair Corralation between Nafoods Group and Vietnam Dairy
Assuming the 90 days trading horizon Nafoods Group JSC is expected to generate 2.17 times more return on investment than Vietnam Dairy. However, Nafoods Group is 2.17 times more volatile than Vietnam Dairy Products. It trades about 0.06 of its potential returns per unit of risk. Vietnam Dairy Products is currently generating about 0.0 per unit of risk. If you would invest 1,704,546 in Nafoods Group JSC on September 14, 2024 and sell it today you would earn a total of 250,454 from holding Nafoods Group JSC or generate 14.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nafoods Group JSC vs. Vietnam Dairy Products
Performance |
| Timeline |
| Nafoods Group JSC |
| Vietnam Dairy Products |
Nafoods Group and Vietnam Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Vietnam Dairy
The main advantage of trading using opposite Nafoods Group and Vietnam Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Vietnam Dairy 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 Dairy will offset losses from the drop in Vietnam Dairy's long position.| Nafoods Group vs. Saigon Telecommunication Technologies | Nafoods Group vs. Elcom Technology Communications | Nafoods Group vs. VietinBank Securities JSC | Nafoods Group vs. VTC Telecommunications JSC |
| Vietnam Dairy vs. Tien Giang Investment | Vietnam Dairy vs. PV2 Investment JSC | Vietnam Dairy vs. Construction And Investment | Vietnam Dairy vs. Development Investment Construction |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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