Correlation Between PVI Reinsurance and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both PVI Reinsurance and Nafoods Group 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 PVI Reinsurance and Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PVI Reinsurance Corp and Nafoods Group JSC, you can compare the effects of market volatilities on PVI Reinsurance and Nafoods Group 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 PVI Reinsurance with a short position of Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVI Reinsurance and Nafoods Group.
Diversification Opportunities for PVI Reinsurance and Nafoods Group
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PVI and Nafoods is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PVI Reinsurance Corp and Nafoods Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafoods Group JSC and PVI Reinsurance 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 PVI Reinsurance Corp are associated (or correlated) with Nafoods Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafoods Group JSC has no effect on the direction of PVI Reinsurance i.e., PVI Reinsurance and Nafoods Group go up and down completely randomly.
Pair Corralation between PVI Reinsurance and Nafoods Group
Assuming the 90 days trading horizon PVI Reinsurance Corp is expected to generate 0.85 times more return on investment than Nafoods Group. However, PVI Reinsurance Corp is 1.17 times less risky than Nafoods Group. It trades about -0.04 of its potential returns per unit of risk. Nafoods Group JSC is currently generating about -0.04 per unit of risk. If you would invest 1,880,000 in PVI Reinsurance Corp on September 1, 2024 and sell it today you would lose (30,000) from holding PVI Reinsurance Corp or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.73% |
| Values | Daily Returns |
PVI Reinsurance Corp vs. Nafoods Group JSC
Performance |
| Timeline |
| PVI Reinsurance Corp |
| Nafoods Group JSC |
PVI Reinsurance and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PVI Reinsurance and Nafoods Group
The main advantage of trading using opposite PVI Reinsurance and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVI Reinsurance position performs unexpectedly, Nafoods Group 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 Nafoods Group will offset losses from the drop in Nafoods Group's long position.| PVI Reinsurance vs. FIT INVEST JSC | PVI Reinsurance vs. Damsan JSC | PVI Reinsurance vs. An Phat Plastic | PVI Reinsurance vs. Alphanam ME |
| Nafoods Group vs. FIT INVEST JSC | Nafoods Group vs. Damsan JSC | Nafoods Group vs. An Phat Plastic | Nafoods Group vs. Alphanam ME |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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