Correlation Between Vietnam Dairy and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both Vietnam Dairy 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 Vietnam Dairy and Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Dairy Products and Nafoods Group JSC, you can compare the effects of market volatilities on Vietnam Dairy 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 Vietnam Dairy with a short position of Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Dairy and Nafoods Group.
Diversification Opportunities for Vietnam Dairy and Nafoods Group
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vietnam and Nafoods is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Dairy Products 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 Vietnam Dairy 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 Vietnam Dairy Products 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 Vietnam Dairy i.e., Vietnam Dairy and Nafoods Group go up and down completely randomly.
Pair Corralation between Vietnam Dairy and Nafoods Group
Assuming the 90 days trading horizon Vietnam Dairy Products is expected to under-perform the Nafoods Group. But the stock apears to be less risky and, when comparing its historical volatility, Vietnam Dairy Products is 1.44 times less risky than Nafoods Group. The stock trades about -0.05 of its potential returns per unit of risk. The Nafoods Group JSC is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,970,000 in Nafoods Group JSC on October 7, 2024 and sell it today you would earn a total of 0.00 from holding Nafoods Group JSC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Vietnam Dairy Products vs. Nafoods Group JSC
Performance |
| Timeline |
| Vietnam Dairy Products |
| Nafoods Group JSC |
Vietnam Dairy and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Dairy and Nafoods Group
The main advantage of trading using opposite Vietnam Dairy and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Dairy 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.| Vietnam Dairy vs. FIT INVEST JSC | Vietnam Dairy vs. Damsan JSC | Vietnam Dairy vs. An Phat Plastic | Vietnam Dairy 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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