Correlation Between Damsan JSC and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Asia Pacific 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 Damsan JSC and Asia Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Asia Pacific Investment, you can compare the effects of market volatilities on Damsan JSC and Asia Pacific 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 Damsan JSC with a short position of Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Asia Pacific.
Diversification Opportunities for Damsan JSC and Asia Pacific
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Damsan and Asia is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Asia Pacific Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Investment and Damsan JSC 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 Damsan JSC are associated (or correlated) with Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Investment has no effect on the direction of Damsan JSC i.e., Damsan JSC and Asia Pacific go up and down completely randomly.
Pair Corralation between Damsan JSC and Asia Pacific
Assuming the 90 days trading horizon Damsan JSC is expected to generate 0.46 times more return on investment than Asia Pacific. However, Damsan JSC is 2.18 times less risky than Asia Pacific. It trades about -0.27 of its potential returns per unit of risk. Asia Pacific Investment is currently generating about -0.23 per unit of risk. If you would invest 929,000 in Damsan JSC on August 29, 2024 and sell it today you would lose (47,000) from holding Damsan JSC or give up 5.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Damsan JSC vs. Asia Pacific Investment
Performance |
| Timeline |
| Damsan JSC |
| Asia Pacific Investment |
Damsan JSC and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Asia Pacific
The main advantage of trading using opposite Damsan JSC and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Asia Pacific 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 Asia Pacific will offset losses from the drop in Asia Pacific's long position.| Damsan JSC vs. FIT INVEST JSC | Damsan JSC vs. An Phat Plastic | Damsan JSC vs. Alphanam ME | Damsan JSC vs. APG Securities Joint |
| Asia Pacific vs. FIT INVEST JSC | Asia Pacific vs. Damsan JSC | Asia Pacific vs. An Phat Plastic | Asia Pacific vs. Alphanam ME |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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