Correlation Between Damsan JSC and Song Hong
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Song Hong 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 Song Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Song Hong Aluminum, you can compare the effects of market volatilities on Damsan JSC and Song Hong 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 Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Song Hong.
Diversification Opportunities for Damsan JSC and Song Hong
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Damsan and Song is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Song Hong Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Aluminum 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 Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Aluminum has no effect on the direction of Damsan JSC i.e., Damsan JSC and Song Hong go up and down completely randomly.
Pair Corralation between Damsan JSC and Song Hong
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Song Hong. But the stock apears to be less risky and, when comparing its historical volatility, Damsan JSC is 1.03 times less risky than Song Hong. The stock trades about -0.09 of its potential returns per unit of risk. The Song Hong Aluminum is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 620,000 in Song Hong Aluminum on August 25, 2024 and sell it today you would lose (140,000) from holding Song Hong Aluminum or give up 22.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Song Hong Aluminum
Performance |
| Timeline |
| Damsan JSC |
| Song Hong Aluminum |
Damsan JSC and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Song Hong
The main advantage of trading using opposite Damsan JSC and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| Damsan JSC vs. FIT INVEST JSC | Damsan JSC vs. An Phat Plastic | Damsan JSC vs. APG Securities Joint | Damsan JSC vs. Binhthuan Agriculture Services |
| Song Hong vs. FIT INVEST JSC | Song Hong vs. Damsan JSC | Song Hong vs. An Phat Plastic | Song Hong vs. APG Securities Joint |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |