Correlation Between Nam Kim and An Phat
Can any of the company-specific risk be diversified away by investing in both Nam Kim and An Phat 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 Nam Kim and An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nam Kim Steel and An Phat Plastic, you can compare the effects of market volatilities on Nam Kim and An Phat 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 Nam Kim with a short position of An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Kim and An Phat.
Diversification Opportunities for Nam Kim and An Phat
Very good diversification
The 3 months correlation between Nam and AAA is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nam Kim Steel and An Phat Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Phat Plastic and Nam Kim 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 Nam Kim Steel are associated (or correlated) with An Phat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Phat Plastic has no effect on the direction of Nam Kim i.e., Nam Kim and An Phat go up and down completely randomly.
Pair Corralation between Nam Kim and An Phat
Assuming the 90 days trading horizon Nam Kim is expected to generate 6.24 times less return on investment than An Phat. In addition to that, Nam Kim is 1.28 times more volatile than An Phat Plastic. It trades about 0.0 of its total potential returns per unit of risk. An Phat Plastic is currently generating about 0.01 per unit of volatility. If you would invest 890,000 in An Phat Plastic on November 27, 2024 and sell it today you would earn a total of 3,000 from holding An Phat Plastic or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Kim Steel vs. An Phat Plastic
Performance |
| Timeline |
| Nam Kim Steel |
| An Phat Plastic |
Nam Kim and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Kim and An Phat
The main advantage of trading using opposite Nam Kim and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Kim position performs unexpectedly, An Phat 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 An Phat will offset losses from the drop in An Phat's long position.| Nam Kim vs. Saigon Viendong Technology | Nam Kim vs. Elcom Technology Communications | Nam Kim vs. Fecon Mining JSC | Nam Kim vs. Picomat Plastic JSC |
| An Phat vs. Vinhomes JSC | An Phat vs. BaoMinh Insurance Corp | An Phat vs. Hung Hau Agricultural | An Phat vs. Dong A Hotel |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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