Correlation Between Damsan JSC and LHC
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and LHC 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 LHC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and LHC, you can compare the effects of market volatilities on Damsan JSC and LHC 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 LHC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and LHC.
Diversification Opportunities for Damsan JSC and LHC
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Damsan and LHC is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and LHC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHC 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 LHC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHC has no effect on the direction of Damsan JSC i.e., Damsan JSC and LHC go up and down completely randomly.
Pair Corralation between Damsan JSC and LHC
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the LHC. In addition to that, Damsan JSC is 1.44 times more volatile than LHC. It trades about -0.05 of its total potential returns per unit of risk. LHC is currently generating about 0.1 per unit of volatility. If you would invest 4,986,440 in LHC on September 4, 2024 and sell it today you would earn a total of 2,183,560 from holding LHC or generate 43.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.14% |
| Values | Daily Returns |
Damsan JSC vs. LHC
Performance |
| Timeline |
| Damsan JSC |
| LHC |
Damsan JSC and LHC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and LHC
The main advantage of trading using opposite Damsan JSC and LHC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, LHC 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 LHC will offset losses from the drop in LHC's long position.| Damsan JSC vs. Telecoms Informatics JSC | Damsan JSC vs. Sao Ta Foods | Damsan JSC vs. Vietnam Airlines JSC | Damsan JSC vs. Petrovietnam Drilling Mud |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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