Correlation Between Tien Phong and Nam Kim
Can any of the company-specific risk be diversified away by investing in both Tien Phong and Nam Kim 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 Tien Phong and Nam Kim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Phong Plastic and Nam Kim Steel, you can compare the effects of market volatilities on Tien Phong and Nam Kim 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 Tien Phong with a short position of Nam Kim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Phong and Nam Kim.
Diversification Opportunities for Tien Phong and Nam Kim
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tien and Nam is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tien Phong Plastic and Nam Kim Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Kim Steel and Tien Phong 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 Tien Phong Plastic are associated (or correlated) with Nam Kim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Kim Steel has no effect on the direction of Tien Phong i.e., Tien Phong and Nam Kim go up and down completely randomly.
Pair Corralation between Tien Phong and Nam Kim
Assuming the 90 days trading horizon Tien Phong Plastic is expected to generate 1.13 times more return on investment than Nam Kim. However, Tien Phong is 1.13 times more volatile than Nam Kim Steel. It trades about 0.19 of its potential returns per unit of risk. Nam Kim Steel is currently generating about -0.18 per unit of risk. If you would invest 5,610,000 in Tien Phong Plastic on September 4, 2024 and sell it today you would earn a total of 420,000 from holding Tien Phong Plastic or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tien Phong Plastic vs. Nam Kim Steel
Performance |
| Timeline |
| Tien Phong Plastic |
| Nam Kim Steel |
Tien Phong and Nam Kim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Phong and Nam Kim
The main advantage of trading using opposite Tien Phong and Nam Kim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Phong position performs unexpectedly, Nam Kim 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 Nam Kim will offset losses from the drop in Nam Kim's long position.| Tien Phong vs. FIT INVEST JSC | Tien Phong vs. Damsan JSC | Tien Phong vs. An Phat Plastic | Tien Phong vs. Alphanam ME |
| Nam Kim vs. Tien Phong Plastic | Nam Kim vs. Picomat Plastic JSC | Nam Kim vs. Bao Ngoc Investment | Nam Kim vs. Danang Education 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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