Correlation Between Damsan JSC and Everland Investment
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Everland 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 Everland 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 Everland Investment JSC, you can compare the effects of market volatilities on Damsan JSC and Everland 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 Everland Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Everland Investment.
Diversification Opportunities for Damsan JSC and Everland Investment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Damsan and Everland is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Everland Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everland Investment JSC 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 Everland Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everland Investment JSC has no effect on the direction of Damsan JSC i.e., Damsan JSC and Everland Investment go up and down completely randomly.
Pair Corralation between Damsan JSC and Everland Investment
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Everland Investment. But the stock apears to be less risky and, when comparing its historical volatility, Damsan JSC is 1.24 times less risky than Everland Investment. The stock trades about -0.04 of its potential returns per unit of risk. The Everland Investment JSC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 546,000 in Everland Investment JSC on August 31, 2024 and sell it today you would earn a total of 103,000 from holding Everland Investment JSC or generate 18.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Everland Investment JSC
Performance |
| Timeline |
| Damsan JSC |
| Everland Investment JSC |
Damsan JSC and Everland Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Everland Investment
The main advantage of trading using opposite Damsan JSC and Everland Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Everland 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 Everland Investment will offset losses from the drop in Everland Investment's long position.| Damsan JSC vs. Tien Giang Investment | Damsan JSC vs. Vu Dang Investment | Damsan JSC vs. Bao Ngoc Investment | Damsan JSC vs. Vina2 Investment and |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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