Correlation Between TDT Investment and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both TDT Investment 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 TDT Investment and Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TDT Investment and and Nafoods Group JSC, you can compare the effects of market volatilities on TDT Investment 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 TDT Investment with a short position of Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TDT Investment and Nafoods Group.
Diversification Opportunities for TDT Investment and Nafoods Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TDT and Nafoods is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding TDT Investment and 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 TDT Investment 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 TDT Investment and 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 TDT Investment i.e., TDT Investment and Nafoods Group go up and down completely randomly.
Pair Corralation between TDT Investment and Nafoods Group
Assuming the 90 days trading horizon TDT Investment and is expected to under-perform the Nafoods Group. But the stock apears to be less risky and, when comparing its historical volatility, TDT Investment and is 1.46 times less risky than Nafoods Group. The stock trades about -0.01 of its potential returns per unit of risk. The Nafoods Group JSC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,118,182 in Nafoods Group JSC on August 26, 2024 and sell it today you would earn a total of 821,818 from holding Nafoods Group JSC or generate 73.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.75% |
| Values | Daily Returns |
TDT Investment and vs. Nafoods Group JSC
Performance |
| Timeline |
| TDT Investment |
| Nafoods Group JSC |
TDT Investment and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TDT Investment and Nafoods Group
The main advantage of trading using opposite TDT Investment and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TDT Investment 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.| TDT Investment vs. FIT INVEST JSC | TDT Investment vs. Damsan JSC | TDT Investment vs. An Phat Plastic | TDT Investment vs. APG Securities Joint |
| Nafoods Group vs. FIT INVEST JSC | Nafoods Group vs. Damsan JSC | Nafoods Group vs. An Phat Plastic | Nafoods Group vs. APG Securities Joint |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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