Correlation Between Nam Kim and APG Securities
Can any of the company-specific risk be diversified away by investing in both Nam Kim and APG Securities 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 APG Securities 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 APG Securities Joint, you can compare the effects of market volatilities on Nam Kim and APG Securities 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 APG Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Kim and APG Securities.
Diversification Opportunities for Nam Kim and APG Securities
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nam and APG is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nam Kim Steel and APG Securities Joint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APG Securities Joint 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 APG Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APG Securities Joint has no effect on the direction of Nam Kim i.e., Nam Kim and APG Securities go up and down completely randomly.
Pair Corralation between Nam Kim and APG Securities
Assuming the 90 days trading horizon Nam Kim Steel is expected to under-perform the APG Securities. But the stock apears to be less risky and, when comparing its historical volatility, Nam Kim Steel is 1.3 times less risky than APG Securities. The stock trades about -0.21 of its potential returns per unit of risk. The APG Securities Joint is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 939,000 in APG Securities Joint on August 29, 2024 and sell it today you would lose (34,000) from holding APG Securities Joint or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Kim Steel vs. APG Securities Joint
Performance |
| Timeline |
| Nam Kim Steel |
| APG Securities Joint |
Nam Kim and APG Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Kim and APG Securities
The main advantage of trading using opposite Nam Kim and APG Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Kim position performs unexpectedly, APG Securities 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 APG Securities will offset losses from the drop in APG Securities' long position.The idea behind Nam Kim Steel and APG Securities Joint pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| APG Securities vs. FIT INVEST JSC | APG Securities vs. Damsan JSC | APG Securities vs. An Phat Plastic | APG Securities vs. Alphanam ME |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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