Correlation Between Damsan JSC and Industrial Urban
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Industrial Urban 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 Industrial Urban into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Industrial Urban Development, you can compare the effects of market volatilities on Damsan JSC and Industrial Urban 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 Industrial Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Industrial Urban.
Diversification Opportunities for Damsan JSC and Industrial Urban
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Damsan and Industrial is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Industrial Urban Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Urban Dev 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 Industrial Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Urban Dev has no effect on the direction of Damsan JSC i.e., Damsan JSC and Industrial Urban go up and down completely randomly.
Pair Corralation between Damsan JSC and Industrial Urban
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Industrial Urban. But the stock apears to be less risky and, when comparing its historical volatility, Damsan JSC is 2.94 times less risky than Industrial Urban. The stock trades about -0.07 of its potential returns per unit of risk. The Industrial Urban Development is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,250,656 in Industrial Urban Development on September 2, 2024 and sell it today you would lose (50,656) from holding Industrial Urban Development or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Industrial Urban Development
Performance |
| Timeline |
| Damsan JSC |
| Industrial Urban Dev |
Damsan JSC and Industrial Urban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Industrial Urban
The main advantage of trading using opposite Damsan JSC and Industrial Urban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Industrial Urban 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 Industrial Urban will offset losses from the drop in Industrial Urban'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 |
| Industrial Urban vs. PetroVietnam Transportation Corp | Industrial Urban vs. Petrovietnam Drilling Mud | Industrial Urban vs. Vietnam Petroleum Transport | Industrial Urban vs. Hochiminh City Metal |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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