Correlation Between Chia and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both Chia 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 Chia and Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and Nafoods Group JSC, you can compare the effects of market volatilities on Chia 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 Chia with a short position of Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and Nafoods Group.
Diversification Opportunities for Chia and Nafoods Group
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chia and Nafoods is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chia 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 Chia 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 Chia 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 Chia i.e., Chia and Nafoods Group go up and down completely randomly.
Pair Corralation between Chia and Nafoods Group
Assuming the 90 days trading horizon Chia is expected to under-perform the Nafoods Group. In addition to that, Chia is 7.2 times more volatile than Nafoods Group JSC. It trades about -0.19 of its total potential returns per unit of risk. Nafoods Group JSC is currently generating about -0.03 per unit of volatility. If you would invest 1,975,000 in Nafoods Group JSC on November 2, 2024 and sell it today you would lose (10,000) from holding Nafoods Group JSC or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Chia vs. Nafoods Group JSC
Performance |
| Timeline |
| Chia |
| Nafoods Group JSC |
Chia and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and Nafoods Group
The main advantage of trading using opposite Chia and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia 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.The idea behind Chia and Nafoods Group JSC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nafoods Group vs. Ba Ria Thermal | Nafoods Group vs. Transport and Industry | Nafoods Group vs. Hochiminh City Metal | Nafoods Group vs. South Basic Chemicals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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