Correlation Between Damsan JSC and Sao Ta
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Sao Ta 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 Sao Ta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Sao Ta Foods, you can compare the effects of market volatilities on Damsan JSC and Sao Ta 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 Sao Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Sao Ta.
Diversification Opportunities for Damsan JSC and Sao Ta
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Damsan and Sao is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Sao Ta Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Ta Foods 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 Sao Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Ta Foods has no effect on the direction of Damsan JSC i.e., Damsan JSC and Sao Ta go up and down completely randomly.
Pair Corralation between Damsan JSC and Sao Ta
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Sao Ta. In addition to that, Damsan JSC is 1.86 times more volatile than Sao Ta Foods. It trades about -0.11 of its total potential returns per unit of risk. Sao Ta Foods is currently generating about -0.03 per unit of volatility. If you would invest 4,810,000 in Sao Ta Foods on November 2, 2024 and sell it today you would lose (160,000) from holding Sao Ta Foods or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Sao Ta Foods
Performance |
| Timeline |
| Damsan JSC |
| Sao Ta Foods |
Damsan JSC and Sao Ta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Sao Ta
The main advantage of trading using opposite Damsan JSC and Sao Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Sao Ta 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 Sao Ta will offset losses from the drop in Sao Ta's long position.| Damsan JSC vs. Innovative Technology Development | Damsan JSC vs. Pacific Petroleum Transportation | Damsan JSC vs. Ba Ria Thermal | Damsan JSC vs. Elcom Technology Communications |
| Sao Ta vs. Vien Dong Investment | Sao Ta vs. Tien Giang Investment | Sao Ta vs. Ha Noi Education | Sao Ta vs. LDG Investment JSC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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