Correlation Between Nafoods Group and Transimex Transportation
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Transimex Transportation 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 Nafoods Group and Transimex Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nafoods Group JSC and Transimex Transportation JSC, you can compare the effects of market volatilities on Nafoods Group and Transimex Transportation 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 Nafoods Group with a short position of Transimex Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Transimex Transportation.
Diversification Opportunities for Nafoods Group and Transimex Transportation
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nafoods and Transimex is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Transimex Transportation JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transimex Transportation and Nafoods Group 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 Nafoods Group JSC are associated (or correlated) with Transimex Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transimex Transportation has no effect on the direction of Nafoods Group i.e., Nafoods Group and Transimex Transportation go up and down completely randomly.
Pair Corralation between Nafoods Group and Transimex Transportation
Assuming the 90 days trading horizon Nafoods Group is expected to generate 8.9 times less return on investment than Transimex Transportation. In addition to that, Nafoods Group is 1.17 times more volatile than Transimex Transportation JSC. It trades about 0.02 of its total potential returns per unit of risk. Transimex Transportation JSC is currently generating about 0.18 per unit of volatility. If you would invest 1,700,000 in Transimex Transportation JSC on September 25, 2024 and sell it today you would earn a total of 40,000 from holding Transimex Transportation JSC or generate 2.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 76.19% |
Values | Daily Returns |
Nafoods Group JSC vs. Transimex Transportation JSC
Performance |
Timeline |
Nafoods Group JSC |
Transimex Transportation |
Nafoods Group and Transimex Transportation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nafoods Group and Transimex Transportation
The main advantage of trading using opposite Nafoods Group and Transimex Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Transimex Transportation 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 Transimex Transportation will offset losses from the drop in Transimex Transportation's long position.Nafoods Group vs. FIT INVEST JSC | Nafoods Group vs. Damsan JSC | Nafoods Group vs. An Phat Plastic | Nafoods Group vs. Alphanam ME |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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