Correlation Between Damsan JSC and Da Nang
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Da Nang 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 Da Nang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Da Nang Construction, you can compare the effects of market volatilities on Damsan JSC and Da Nang 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 Da Nang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Da Nang.
Diversification Opportunities for Damsan JSC and Da Nang
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Damsan and DXV is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Da Nang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Da Nang Construction 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 Da Nang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Da Nang Construction has no effect on the direction of Damsan JSC i.e., Damsan JSC and Da Nang go up and down completely randomly.
Pair Corralation between Damsan JSC and Da Nang
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Da Nang. But the stock apears to be less risky and, when comparing its historical volatility, Damsan JSC is 3.36 times less risky than Da Nang. The stock trades about -0.32 of its potential returns per unit of risk. The Da Nang Construction is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 380,000 in Da Nang Construction on November 4, 2024 and sell it today you would earn a total of 8,000 from holding Da Nang Construction or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Da Nang Construction
Performance |
| Timeline |
| Damsan JSC |
| Da Nang Construction |
Damsan JSC and Da Nang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Da Nang
The main advantage of trading using opposite Damsan JSC and Da Nang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Da Nang 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 Da Nang will offset losses from the drop in Da Nang's long position.| Damsan JSC vs. Pha Lai Thermal | Damsan JSC vs. Fecon Mining JSC | Damsan JSC vs. Innovative Technology Development | Damsan JSC vs. Dong A Hotel |
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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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