Correlation Between BaoMinh Insurance and Nam Kim
Can any of the company-specific risk be diversified away by investing in both BaoMinh Insurance 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 BaoMinh Insurance and Nam Kim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BaoMinh Insurance Corp and Nam Kim Steel, you can compare the effects of market volatilities on BaoMinh Insurance 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 BaoMinh Insurance with a short position of Nam Kim. Check out your portfolio center. Please also check ongoing floating volatility patterns of BaoMinh Insurance and Nam Kim.
Diversification Opportunities for BaoMinh Insurance and Nam Kim
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BaoMinh and Nam is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BaoMinh Insurance Corp 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 BaoMinh Insurance 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 BaoMinh Insurance Corp 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 BaoMinh Insurance i.e., BaoMinh Insurance and Nam Kim go up and down completely randomly.
Pair Corralation between BaoMinh Insurance and Nam Kim
Assuming the 90 days trading horizon BaoMinh Insurance Corp is expected to generate 0.62 times more return on investment than Nam Kim. However, BaoMinh Insurance Corp is 1.62 times less risky than Nam Kim. It trades about -0.08 of its potential returns per unit of risk. Nam Kim Steel is currently generating about -0.17 per unit of risk. If you would invest 2,090,000 in BaoMinh Insurance Corp on August 29, 2024 and sell it today you would lose (40,000) from holding BaoMinh Insurance Corp or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BaoMinh Insurance Corp vs. Nam Kim Steel
Performance |
| Timeline |
| BaoMinh Insurance Corp |
| Nam Kim Steel |
BaoMinh Insurance and Nam Kim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BaoMinh Insurance and Nam Kim
The main advantage of trading using opposite BaoMinh Insurance and Nam Kim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BaoMinh Insurance 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.| BaoMinh Insurance vs. FIT INVEST JSC | BaoMinh Insurance vs. Damsan JSC | BaoMinh Insurance vs. An Phat Plastic | BaoMinh Insurance vs. APG Securities Joint |
| Nam Kim vs. FIT INVEST JSC | Nam Kim vs. Damsan JSC | Nam Kim vs. An Phat Plastic | Nam Kim 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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