Correlation Between Nafoods Group and Vincom Retail
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Vincom Retail 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 Vincom Retail 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 Vincom Retail JSC, you can compare the effects of market volatilities on Nafoods Group and Vincom Retail 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 Vincom Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Vincom Retail.
Diversification Opportunities for Nafoods Group and Vincom Retail
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nafoods and Vincom is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC 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 Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of Nafoods Group i.e., Nafoods Group and Vincom Retail go up and down completely randomly.
Pair Corralation between Nafoods Group and Vincom Retail
Assuming the 90 days trading horizon Nafoods Group JSC is expected to generate 1.3 times more return on investment than Vincom Retail. However, Nafoods Group is 1.3 times more volatile than Vincom Retail JSC. It trades about 0.06 of its potential returns per unit of risk. Vincom Retail JSC is currently generating about -0.11 per unit of risk. If you would invest 1,736,364 in Nafoods Group JSC on September 3, 2024 and sell it today you would earn a total of 278,636 from holding Nafoods Group JSC or generate 16.05% 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. Vincom Retail JSC
Performance |
| Timeline |
| Nafoods Group JSC |
| Vincom Retail JSC |
Nafoods Group and Vincom Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Vincom Retail
The main advantage of trading using opposite Nafoods Group and Vincom Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Vincom Retail 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 Vincom Retail will offset losses from the drop in Vincom Retail's long position.| Nafoods Group vs. FIT INVEST JSC | Nafoods Group vs. Damsan JSC | Nafoods Group vs. An Phat Plastic | Nafoods Group vs. Alphanam ME |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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