Correlation Between Damsan JSC and Bich Chi
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Bich Chi 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 Bich Chi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Bich Chi Food, you can compare the effects of market volatilities on Damsan JSC and Bich Chi 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 Bich Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Bich Chi.
Diversification Opportunities for Damsan JSC and Bich Chi
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Damsan and Bich is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Bich Chi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bich Chi Food 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 Bich Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bich Chi Food has no effect on the direction of Damsan JSC i.e., Damsan JSC and Bich Chi go up and down completely randomly.
Pair Corralation between Damsan JSC and Bich Chi
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Bich Chi. But the stock apears to be less risky and, when comparing its historical volatility, Damsan JSC is 1.17 times less risky than Bich Chi. The stock trades about -0.11 of its potential returns per unit of risk. The Bich Chi Food is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,837,405 in Bich Chi Food on September 3, 2024 and sell it today you would earn a total of 1,162,595 from holding Bich Chi Food or generate 40.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 70.08% |
| Values | Daily Returns |
Damsan JSC vs. Bich Chi Food
Performance |
| Timeline |
| Damsan JSC |
| Bich Chi Food |
Damsan JSC and Bich Chi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Bich Chi
The main advantage of trading using opposite Damsan JSC and Bich Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Bich Chi 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 Bich Chi will offset losses from the drop in Bich Chi'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 |
| Bich Chi vs. FIT INVEST JSC | Bich Chi vs. Damsan JSC | Bich Chi vs. An Phat Plastic | Bich Chi 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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