Correlation Between APG Securities and Nam Kim
Can any of the company-specific risk be diversified away by investing in both APG Securities and Nam Kim 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 APG Securities and Nam Kim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APG Securities Joint and Nam Kim Steel, you can compare the effects of market volatilities on APG Securities and Nam Kim 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 APG Securities with a short position of Nam Kim. Check out your portfolio center. Please also check ongoing floating volatility patterns of APG Securities and Nam Kim.
Diversification Opportunities for APG Securities and Nam Kim
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between APG and Nam is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding APG Securities Joint and Nam Kim Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Kim Steel and APG Securities 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 APG Securities Joint are associated (or correlated) with Nam Kim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Kim Steel has no effect on the direction of APG Securities i.e., APG Securities and Nam Kim go up and down completely randomly.
Pair Corralation between APG Securities and Nam Kim
Assuming the 90 days trading horizon APG Securities Joint is expected to generate 0.29 times more return on investment than Nam Kim. However, APG Securities Joint is 3.44 times less risky than Nam Kim. It trades about -0.22 of its potential returns per unit of risk. Nam Kim Steel is currently generating about -0.16 per unit of risk. If you would invest 920,000 in APG Securities Joint on September 1, 2024 and sell it today you would lose (21,000) from holding APG Securities Joint or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
APG Securities Joint vs. Nam Kim Steel
Performance |
| Timeline |
| APG Securities Joint |
| Nam Kim Steel |
APG Securities and Nam Kim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APG Securities and Nam Kim
The main advantage of trading using opposite APG Securities and Nam Kim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APG Securities position performs unexpectedly, Nam Kim 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 Nam Kim will offset losses from the drop in Nam Kim's long position.| APG Securities vs. Damsan JSC | APG Securities vs. An Phat Plastic | APG Securities vs. Alphanam ME | APG Securities vs. Binhthuan Agriculture Services |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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