Correlation Between Nam Kim and Viet Thanh
Can any of the company-specific risk be diversified away by investing in both Nam Kim and Viet Thanh 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 Viet Thanh 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 Viet Thanh Plastic, you can compare the effects of market volatilities on Nam Kim and Viet Thanh 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 Viet Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Kim and Viet Thanh.
Diversification Opportunities for Nam Kim and Viet Thanh
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nam and Viet is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nam Kim Steel and Viet Thanh Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viet Thanh 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 Viet Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viet Thanh Plastic has no effect on the direction of Nam Kim i.e., Nam Kim and Viet Thanh go up and down completely randomly.
Pair Corralation between Nam Kim and Viet Thanh
Assuming the 90 days trading horizon Nam Kim Steel is expected to under-perform the Viet Thanh. In addition to that, Nam Kim is 1.17 times more volatile than Viet Thanh Plastic. It trades about -0.03 of its total potential returns per unit of risk. Viet Thanh Plastic is currently generating about 0.12 per unit of volatility. If you would invest 800,000 in Viet Thanh Plastic on October 30, 2024 and sell it today you would earn a total of 940,000 from holding Viet Thanh Plastic or generate 117.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Nam Kim Steel vs. Viet Thanh Plastic
Performance |
| Timeline |
| Nam Kim Steel |
| Viet Thanh Plastic |
Nam Kim and Viet Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Kim and Viet Thanh
The main advantage of trading using opposite Nam Kim and Viet Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Kim position performs unexpectedly, Viet Thanh 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 Viet Thanh will offset losses from the drop in Viet Thanh'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 |
| Viet Thanh vs. Ben Thanh Rubber | Viet Thanh vs. Thong Nhat Rubber | Viet Thanh vs. Construction And Investment | Viet Thanh vs. Petrolimex International Trading |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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