Correlation Between Nam Kim and Tien Phong
Can any of the company-specific risk be diversified away by investing in both Nam Kim and Tien Phong 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 Tien Phong 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 Tien Phong Plastic, you can compare the effects of market volatilities on Nam Kim and Tien Phong 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 Tien Phong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Kim and Tien Phong.
Diversification Opportunities for Nam Kim and Tien Phong
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nam and Tien is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nam Kim Steel and Tien Phong Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Phong 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 Tien Phong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Phong Plastic has no effect on the direction of Nam Kim i.e., Nam Kim and Tien Phong go up and down completely randomly.
Pair Corralation between Nam Kim and Tien Phong
Assuming the 90 days trading horizon Nam Kim Steel is expected to under-perform the Tien Phong. In addition to that, Nam Kim is 1.18 times more volatile than Tien Phong Plastic. It trades about -0.22 of its total potential returns per unit of risk. Tien Phong Plastic is currently generating about 0.17 per unit of volatility. If you would invest 5,990,000 in Tien Phong Plastic on September 12, 2024 and sell it today you would earn a total of 360,000 from holding Tien Phong Plastic or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Kim Steel vs. Tien Phong Plastic
Performance |
| Timeline |
| Nam Kim Steel |
| Tien Phong Plastic |
Nam Kim and Tien Phong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Kim and Tien Phong
The main advantage of trading using opposite Nam Kim and Tien Phong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Kim position performs unexpectedly, Tien Phong 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 Tien Phong will offset losses from the drop in Tien Phong's long position.| Nam Kim vs. Japan Vietnam Medical | Nam Kim vs. PetroVietnam Transportation Corp | Nam Kim vs. Elcom Technology Communications | Nam Kim vs. FPT Digital Retail |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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