Correlation Between Din Capital and Nam Kim
Can any of the company-specific risk be diversified away by investing in both Din Capital 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 Din Capital and Nam Kim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Din Capital Investment and Nam Kim Steel, you can compare the effects of market volatilities on Din Capital 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 Din Capital with a short position of Nam Kim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Nam Kim.
Diversification Opportunities for Din Capital and Nam Kim
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Din and Nam is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment 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 Din Capital 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 Din Capital Investment 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 Din Capital i.e., Din Capital and Nam Kim go up and down completely randomly.
Pair Corralation between Din Capital and Nam Kim
Assuming the 90 days trading horizon Din Capital Investment is expected to generate 0.81 times more return on investment than Nam Kim. However, Din Capital Investment is 1.23 times less risky than Nam Kim. It trades about 0.02 of its potential returns per unit of risk. Nam Kim Steel is currently generating about -0.16 per unit of risk. If you would invest 1,000,000 in Din Capital Investment on October 13, 2024 and sell it today you would earn a total of 20,000 from holding Din Capital Investment or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Din Capital Investment vs. Nam Kim Steel
Performance |
| Timeline |
| Din Capital Investment |
| Nam Kim Steel |
Din Capital and Nam Kim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Din Capital and Nam Kim
The main advantage of trading using opposite Din Capital and Nam Kim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital 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.| Din Capital vs. FIT INVEST JSC | Din Capital vs. Damsan JSC | Din Capital vs. An Phat Plastic | Din Capital vs. APG Securities Joint |
| Nam Kim vs. Din Capital Investment | Nam Kim vs. Transimex Transportation JSC | Nam Kim vs. Construction And Investment | Nam Kim vs. PetroVietnam Transportation Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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