Correlation Between Damsan JSC and Japan Vietnam
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Japan Vietnam 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 Japan Vietnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Japan Vietnam Medical, you can compare the effects of market volatilities on Damsan JSC and Japan Vietnam 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 Japan Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Japan Vietnam.
Diversification Opportunities for Damsan JSC and Japan Vietnam
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Damsan and Japan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Japan Vietnam Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Vietnam Medical 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 Japan Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Vietnam Medical has no effect on the direction of Damsan JSC i.e., Damsan JSC and Japan Vietnam go up and down completely randomly.
Pair Corralation between Damsan JSC and Japan Vietnam
Assuming the 90 days trading horizon Damsan JSC is expected to generate 1.1 times more return on investment than Japan Vietnam. However, Damsan JSC is 1.1 times more volatile than Japan Vietnam Medical. It trades about 0.1 of its potential returns per unit of risk. Japan Vietnam Medical is currently generating about -0.15 per unit of risk. If you would invest 910,000 in Damsan JSC on August 31, 2024 and sell it today you would earn a total of 30,000 from holding Damsan JSC or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Japan Vietnam Medical
Performance |
| Timeline |
| Damsan JSC |
| Japan Vietnam Medical |
Damsan JSC and Japan Vietnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Japan Vietnam
The main advantage of trading using opposite Damsan JSC and Japan Vietnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Japan Vietnam 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 Japan Vietnam will offset losses from the drop in Japan Vietnam'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 |
| Japan Vietnam vs. Hai An Transport | Japan Vietnam vs. 1369 Construction JSC | Japan Vietnam vs. Investment and Industrial | Japan Vietnam vs. Development Investment Construction |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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