Correlation Between Picomat Plastic and Nam Kim
Can any of the company-specific risk be diversified away by investing in both Picomat Plastic 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 Picomat Plastic and Nam Kim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Picomat Plastic JSC and Nam Kim Steel, you can compare the effects of market volatilities on Picomat Plastic 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 Picomat Plastic with a short position of Nam Kim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picomat Plastic and Nam Kim.
Diversification Opportunities for Picomat Plastic and Nam Kim
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Picomat and Nam is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Picomat Plastic JSC 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 Picomat Plastic 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 Picomat Plastic JSC 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 Picomat Plastic i.e., Picomat Plastic and Nam Kim go up and down completely randomly.
Pair Corralation between Picomat Plastic and Nam Kim
Assuming the 90 days trading horizon Picomat Plastic JSC is expected to generate 1.08 times more return on investment than Nam Kim. However, Picomat Plastic is 1.08 times more volatile than Nam Kim Steel. It trades about 0.03 of its potential returns per unit of risk. Nam Kim Steel is currently generating about -0.17 per unit of risk. If you would invest 1,270,000 in Picomat Plastic JSC on August 29, 2024 and sell it today you would earn a total of 10,000 from holding Picomat Plastic JSC or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Picomat Plastic JSC vs. Nam Kim Steel
Performance |
| Timeline |
| Picomat Plastic JSC |
| Nam Kim Steel |
Picomat Plastic and Nam Kim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Picomat Plastic and Nam Kim
The main advantage of trading using opposite Picomat Plastic and Nam Kim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Picomat Plastic 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.| Picomat Plastic vs. FIT INVEST JSC | Picomat Plastic vs. Damsan JSC | Picomat Plastic vs. An Phat Plastic | Picomat Plastic vs. APG Securities Joint |
| Nam Kim vs. FIT INVEST JSC | Nam Kim vs. Damsan JSC | Nam Kim vs. An Phat Plastic | Nam Kim 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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