Correlation Between Nam Kim and Investment
Can any of the company-specific risk be diversified away by investing in both Nam Kim and Investment 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 Investment 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 Investment and Industrial, you can compare the effects of market volatilities on Nam Kim and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Kim and Investment.
Diversification Opportunities for Nam Kim and Investment
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nam and Investment is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nam Kim Steel and Investment and Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Industrial 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment and Industrial has no effect on the direction of Nam Kim i.e., Nam Kim and Investment go up and down completely randomly.
Pair Corralation between Nam Kim and Investment
Assuming the 90 days trading horizon Nam Kim Steel is expected to under-perform the Investment. In addition to that, Nam Kim is 1.5 times more volatile than Investment and Industrial. It trades about -0.27 of its total potential returns per unit of risk. Investment and Industrial is currently generating about -0.09 per unit of volatility. If you would invest 7,080,000 in Investment and Industrial on November 3, 2024 and sell it today you would lose (150,000) from holding Investment and Industrial or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Kim Steel vs. Investment and Industrial
Performance |
| Timeline |
| Nam Kim Steel |
| Investment and Industrial |
Nam Kim and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Kim and Investment
The main advantage of trading using opposite Nam Kim and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Kim position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Nam Kim vs. Hanoi Beer Alcohol | Nam Kim vs. Picomat Plastic JSC | Nam Kim vs. BIDV Insurance Corp | Nam Kim vs. DOMESCO Medical Import |
| Investment vs. Pacific Petroleum Transportation | Investment vs. PostTelecommunication Equipment | Investment vs. Saigon Telecommunication Technologies | Investment vs. Construction And Investment |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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