Correlation Between Japan Vietnam and Nam Kim
Can any of the company-specific risk be diversified away by investing in both Japan Vietnam 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 Japan Vietnam and Nam Kim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Vietnam Medical and Nam Kim Steel, you can compare the effects of market volatilities on Japan Vietnam 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 Japan Vietnam with a short position of Nam Kim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Vietnam and Nam Kim.
Diversification Opportunities for Japan Vietnam and Nam Kim
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Japan and Nam is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Japan Vietnam Medical 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 Japan Vietnam 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 Japan Vietnam Medical 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 Japan Vietnam i.e., Japan Vietnam and Nam Kim go up and down completely randomly.
Pair Corralation between Japan Vietnam and Nam Kim
Assuming the 90 days trading horizon Japan Vietnam Medical is expected to generate 1.09 times more return on investment than Nam Kim. However, Japan Vietnam is 1.09 times more volatile than Nam Kim Steel. It trades about -0.17 of its potential returns per unit of risk. Nam Kim Steel is currently generating about -0.22 per unit of risk. If you would invest 326,000 in Japan Vietnam Medical on September 12, 2024 and sell it today you would lose (26,000) from holding Japan Vietnam Medical or give up 7.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Vietnam Medical vs. Nam Kim Steel
Performance |
| Timeline |
| Japan Vietnam Medical |
| Nam Kim Steel |
Japan Vietnam and Nam Kim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Vietnam and Nam Kim
The main advantage of trading using opposite Japan Vietnam and Nam Kim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Vietnam 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.| Japan Vietnam vs. FIT INVEST JSC | Japan Vietnam vs. Damsan JSC | Japan Vietnam vs. An Phat Plastic | Japan Vietnam vs. Alphanam ME |
| Nam Kim vs. Japan Vietnam Medical | Nam Kim vs. PetroVietnam Transportation Corp | Nam Kim vs. Elcom Technology Communications | Nam Kim vs. FPT Digital Retail |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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