Correlation Between Nam Kim and Sao Vang
Can any of the company-specific risk be diversified away by investing in both Nam Kim and Sao Vang 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 Sao Vang 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 Sao Vang Rubber, you can compare the effects of market volatilities on Nam Kim and Sao Vang 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 Sao Vang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Kim and Sao Vang.
Diversification Opportunities for Nam Kim and Sao Vang
Very weak diversification
The 3 months correlation between Nam and Sao is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nam Kim Steel and Sao Vang Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Vang Rubber 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 Sao Vang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Vang Rubber has no effect on the direction of Nam Kim i.e., Nam Kim and Sao Vang go up and down completely randomly.
Pair Corralation between Nam Kim and Sao Vang
Assuming the 90 days trading horizon Nam Kim Steel is expected to generate 0.43 times more return on investment than Sao Vang. However, Nam Kim Steel is 2.34 times less risky than Sao Vang. It trades about -0.17 of its potential returns per unit of risk. Sao Vang Rubber is currently generating about -0.12 per unit of risk. If you would invest 2,070,000 in Nam Kim Steel on August 29, 2024 and sell it today you would lose (125,000) from holding Nam Kim Steel or give up 6.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 63.64% |
| Values | Daily Returns |
Nam Kim Steel vs. Sao Vang Rubber
Performance |
| Timeline |
| Nam Kim Steel |
| Sao Vang Rubber |
Nam Kim and Sao Vang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Kim and Sao Vang
The main advantage of trading using opposite Nam Kim and Sao Vang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Kim position performs unexpectedly, Sao Vang 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 Sao Vang will offset losses from the drop in Sao Vang's long position.| Nam Kim vs. FIT INVEST JSC | Nam Kim vs. Damsan JSC | Nam Kim vs. An Phat Plastic | Nam Kim vs. APG Securities Joint |
| Sao Vang vs. FIT INVEST JSC | Sao Vang vs. Damsan JSC | Sao Vang vs. An Phat Plastic | Sao Vang vs. APG Securities Joint |
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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