Correlation Between Master Ad and NSL Foods
Can any of the company-specific risk be diversified away by investing in both Master Ad and NSL Foods 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 Master Ad and NSL Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Master Ad Public and NSL Foods Public, you can compare the effects of market volatilities on Master Ad and NSL Foods 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 Master Ad with a short position of NSL Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Master Ad and NSL Foods.
Diversification Opportunities for Master Ad and NSL Foods
Good diversification
The 3 months correlation between Master and NSL is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Master Ad Public and NSL Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSL Foods Public and Master Ad 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 Master Ad Public are associated (or correlated) with NSL Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSL Foods Public has no effect on the direction of Master Ad i.e., Master Ad and NSL Foods go up and down completely randomly.
Pair Corralation between Master Ad and NSL Foods
Assuming the 90 days trading horizon Master Ad Public is expected to generate 1.16 times more return on investment than NSL Foods. However, Master Ad is 1.16 times more volatile than NSL Foods Public. It trades about 0.06 of its potential returns per unit of risk. NSL Foods Public is currently generating about 0.05 per unit of risk. If you would invest 50.00 in Master Ad Public on September 2, 2024 and sell it today you would earn a total of 40.00 from holding Master Ad Public or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Master Ad Public vs. NSL Foods Public
Performance |
| Timeline |
| Master Ad Public |
| NSL Foods Public |
Master Ad and NSL Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Master Ad and NSL Foods
The main advantage of trading using opposite Master Ad and NSL Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Master Ad position performs unexpectedly, NSL Foods 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 NSL Foods will offset losses from the drop in NSL Foods' long position.| Master Ad vs. Rojana Industrial Park | Master Ad vs. Kasikornbank Public | Master Ad vs. Central Retail | Master Ad vs. Business Online PCL |
| NSL Foods vs. Mega Lifesciences Public | NSL Foods vs. Com7 PCL | NSL Foods vs. Thai Union Group | NSL Foods vs. Jay Mart Public |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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