Correlation Between Mekong Fisheries and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both Mekong Fisheries and Damsan JSC 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 Mekong Fisheries and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekong Fisheries JSC and Damsan JSC, you can compare the effects of market volatilities on Mekong Fisheries and Damsan JSC 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 Mekong Fisheries with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekong Fisheries and Damsan JSC.
Diversification Opportunities for Mekong Fisheries and Damsan JSC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mekong and Damsan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mekong Fisheries JSC and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and Mekong Fisheries 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 Mekong Fisheries JSC are associated (or correlated) with Damsan JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damsan JSC has no effect on the direction of Mekong Fisheries i.e., Mekong Fisheries and Damsan JSC go up and down completely randomly.
Pair Corralation between Mekong Fisheries and Damsan JSC
Assuming the 90 days trading horizon Mekong Fisheries JSC is expected to generate 3.23 times more return on investment than Damsan JSC. However, Mekong Fisheries is 3.23 times more volatile than Damsan JSC. It trades about 0.01 of its potential returns per unit of risk. Damsan JSC is currently generating about -0.31 per unit of risk. If you would invest 701,000 in Mekong Fisheries JSC on August 27, 2024 and sell it today you would lose (1,000.00) from holding Mekong Fisheries JSC or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mekong Fisheries JSC vs. Damsan JSC
Performance |
| Timeline |
| Mekong Fisheries JSC |
| Damsan JSC |
Mekong Fisheries and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekong Fisheries and Damsan JSC
The main advantage of trading using opposite Mekong Fisheries and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekong Fisheries position performs unexpectedly, Damsan JSC 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 Damsan JSC will offset losses from the drop in Damsan JSC's long position.| Mekong Fisheries vs. FIT INVEST JSC | Mekong Fisheries vs. Damsan JSC | Mekong Fisheries vs. An Phat Plastic | Mekong Fisheries vs. APG Securities Joint |
| Damsan JSC vs. FIT INVEST JSC | Damsan JSC vs. An Phat Plastic | Damsan JSC vs. APG Securities Joint | Damsan JSC vs. Binhthuan Agriculture Services |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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