Correlation Between Damsan JSC and Hoang Huy
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Hoang Huy 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 Hoang Huy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Hoang Huy Investment, you can compare the effects of market volatilities on Damsan JSC and Hoang Huy 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 Hoang Huy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Hoang Huy.
Diversification Opportunities for Damsan JSC and Hoang Huy
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Damsan and Hoang is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Hoang Huy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoang Huy Investment 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 Hoang Huy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoang Huy Investment has no effect on the direction of Damsan JSC i.e., Damsan JSC and Hoang Huy go up and down completely randomly.
Pair Corralation between Damsan JSC and Hoang Huy
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Hoang Huy. In addition to that, Damsan JSC is 1.24 times more volatile than Hoang Huy Investment. It trades about -0.07 of its total potential returns per unit of risk. Hoang Huy Investment is currently generating about -0.07 per unit of volatility. If you would invest 748,000 in Hoang Huy Investment on October 25, 2024 and sell it today you would lose (36,000) from holding Hoang Huy Investment or give up 4.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Hoang Huy Investment
Performance |
| Timeline |
| Damsan JSC |
| Hoang Huy Investment |
Damsan JSC and Hoang Huy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Hoang Huy
The main advantage of trading using opposite Damsan JSC and Hoang Huy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Hoang Huy 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 Hoang Huy will offset losses from the drop in Hoang Huy's long position.| Damsan JSC vs. Song Hong Aluminum | Damsan JSC vs. Tien Giang Investment | Damsan JSC vs. Hoang Huy Investment | Damsan JSC vs. Dinhvu Port Investment |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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