Correlation Between Nam Kim and Masan Group
Can any of the company-specific risk be diversified away by investing in both Nam Kim and Masan Group 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 Masan Group 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 Masan Group Corp, you can compare the effects of market volatilities on Nam Kim and Masan Group 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 Masan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Kim and Masan Group.
Diversification Opportunities for Nam Kim and Masan Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nam and Masan is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nam Kim Steel and Masan Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masan Group Corp 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 Masan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masan Group Corp has no effect on the direction of Nam Kim i.e., Nam Kim and Masan Group go up and down completely randomly.
Pair Corralation between Nam Kim and Masan Group
Assuming the 90 days trading horizon Nam Kim Steel is expected to under-perform the Masan Group. In addition to that, Nam Kim is 1.19 times more volatile than Masan Group Corp. It trades about -0.03 of its total potential returns per unit of risk. Masan Group Corp is currently generating about 0.03 per unit of volatility. If you would invest 6,620,000 in Masan Group Corp on September 3, 2024 and sell it today you would earn a total of 640,000 from holding Masan Group Corp or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Kim Steel vs. Masan Group Corp
Performance |
| Timeline |
| Nam Kim Steel |
| Masan Group Corp |
Nam Kim and Masan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Kim and Masan Group
The main advantage of trading using opposite Nam Kim and Masan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Kim position performs unexpectedly, Masan Group 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 Masan Group will offset losses from the drop in Masan Group's long position.The idea behind Nam Kim Steel and Masan Group Corp 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.| Masan Group vs. CEO Group JSC | Masan Group vs. PetroVietnam Transportation Corp | Masan Group vs. Hanoi Beer Alcohol | Masan Group vs. Elcom Technology Communications |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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