Correlation Between Thong Nhat and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both Thong Nhat 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 Thong Nhat and Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thong Nhat Rubber and Nafoods Group JSC, you can compare the effects of market volatilities on Thong Nhat 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 Thong Nhat with a short position of Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thong Nhat and Nafoods Group.
Diversification Opportunities for Thong Nhat and Nafoods Group
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thong and Nafoods is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Thong Nhat Rubber 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 Thong Nhat 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 Thong Nhat Rubber 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 Thong Nhat i.e., Thong Nhat and Nafoods Group go up and down completely randomly.
Pair Corralation between Thong Nhat and Nafoods Group
Assuming the 90 days trading horizon Thong Nhat Rubber is expected to under-perform the Nafoods Group. In addition to that, Thong Nhat is 2.32 times more volatile than Nafoods Group JSC. It trades about -0.03 of its total potential returns per unit of risk. Nafoods Group JSC is currently generating about 0.07 per unit of volatility. If you would invest 1,263,636 in Nafoods Group JSC on September 12, 2024 and sell it today you would earn a total of 686,364 from holding Nafoods Group JSC or generate 54.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 50.57% |
| Values | Daily Returns |
Thong Nhat Rubber vs. Nafoods Group JSC
Performance |
| Timeline |
| Thong Nhat Rubber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nafoods Group JSC |
Thong Nhat and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thong Nhat and Nafoods Group
The main advantage of trading using opposite Thong Nhat and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thong Nhat 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.| Thong Nhat vs. Vietnam Dairy Products | Thong Nhat vs. 1369 Construction JSC | Thong Nhat vs. Book And Educational | Thong Nhat vs. PostTelecommunication Equipment |
| Nafoods Group vs. Petrolimex Information Technology | Nafoods Group vs. Petrovietnam Technical Services | Nafoods Group vs. Dong A Hotel | Nafoods Group vs. Hai An Transport |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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