Correlation Between Damsan JSC and Investment
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Investment 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 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Investment and Industrial, you can compare the effects of market volatilities on Damsan JSC and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Investment.
Diversification Opportunities for Damsan JSC and Investment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Damsan and Investment is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Investment and Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Industrial 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment and Industrial has no effect on the direction of Damsan JSC i.e., Damsan JSC and Investment go up and down completely randomly.
Pair Corralation between Damsan JSC and Investment
Assuming the 90 days trading horizon Damsan JSC is expected to generate 1.53 times more return on investment than Investment. However, Damsan JSC is 1.53 times more volatile than Investment and Industrial. It trades about 0.01 of its potential returns per unit of risk. Investment and Industrial is currently generating about -0.02 per unit of risk. If you would invest 876,140 in Damsan JSC on August 25, 2024 and sell it today you would earn a total of 1,860 from holding Damsan JSC or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Investment and Industrial
Performance |
| Timeline |
| Damsan JSC |
| Investment and Industrial |
Damsan JSC and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Investment
The main advantage of trading using opposite Damsan JSC and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Damsan JSC vs. Post and Telecommunications | Damsan JSC vs. Dinhvu Port Investment | Damsan JSC vs. Sea Air Freight | Damsan JSC vs. Vu Dang Investment |
| Investment vs. FIT INVEST JSC | Investment vs. Damsan JSC | Investment vs. An Phat Plastic | Investment vs. APG Securities Joint |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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