Correlation Between Nam Kim and Dinhvu Port

Can any of the company-specific risk be diversified away by investing in both Nam Kim and Dinhvu Port 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 Dinhvu Port 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 Dinhvu Port Investment, you can compare the effects of market volatilities on Nam Kim and Dinhvu Port 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 Dinhvu Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Kim and Dinhvu Port.

Diversification Opportunities for Nam Kim and Dinhvu Port

-0.88

Correlation Coefficient

Nam Kim  Dinhvu Port

Pay attention - limited upside

The 3 months correlation between Nam and Dinhvu is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nam Kim Steel and Dinhvu Port Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dinhvu Port Investment 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 Dinhvu Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dinhvu Port Investment has no effect on the direction of Nam Kim i.e., Nam Kim and Dinhvu Port go up and down completely randomly.

Pair Corralation between Nam Kim and Dinhvu Port

Assuming the 90 days trading horizon Nam Kim Steel is expected to under-perform the Dinhvu Port. In addition to that, Nam Kim is 1.39 times more volatile than Dinhvu Port Investment. It trades about -0.32 of its total potential returns per unit of risk. Dinhvu Port Investment is currently generating about 0.13 per unit of volatility. If you would invest  8,110,000  in Dinhvu Port Investment on October 11, 2024 and sell it today you would earn a total of  230,000  from holding Dinhvu Port Investment or generate 2.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Nam Kim Steel  vs.  Dinhvu Port Investment

Nam Kim Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nam Kim Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Dinhvu Port Investment

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dinhvu Port Investment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dinhvu Port may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nam Kim and Dinhvu Port

The main advantage of trading using opposite Nam Kim and Dinhvu Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Kim position performs unexpectedly, Dinhvu Port 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 Dinhvu Port will offset losses from the drop in Dinhvu Port's long position.

The idea behind Nam Kim Steel and Dinhvu Port Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.