Correlation Between Damsan JSC and Petrolimex International
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Petrolimex International 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 Petrolimex International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Petrolimex International Trading, you can compare the effects of market volatilities on Damsan JSC and Petrolimex International 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 Petrolimex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Petrolimex International.
Diversification Opportunities for Damsan JSC and Petrolimex International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Damsan and Petrolimex is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Petrolimex International Tradi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex International 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 Petrolimex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex International has no effect on the direction of Damsan JSC i.e., Damsan JSC and Petrolimex International go up and down completely randomly.
Pair Corralation between Damsan JSC and Petrolimex International
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Petrolimex International. In addition to that, Damsan JSC is 2.21 times more volatile than Petrolimex International Trading. It trades about -0.32 of its total potential returns per unit of risk. Petrolimex International Trading is currently generating about -0.22 per unit of volatility. If you would invest 544,000 in Petrolimex International Trading on November 4, 2024 and sell it today you would lose (9,000) from holding Petrolimex International Trading or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.24% |
| Values | Daily Returns |
Damsan JSC vs. Petrolimex International Tradi
Performance |
| Timeline |
| Damsan JSC |
| Petrolimex International |
Damsan JSC and Petrolimex International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Petrolimex International
The main advantage of trading using opposite Damsan JSC and Petrolimex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Petrolimex International 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 Petrolimex International will offset losses from the drop in Petrolimex International's long position.| Damsan JSC vs. Pha Lai Thermal | Damsan JSC vs. Fecon Mining JSC | Damsan JSC vs. Innovative Technology Development | Damsan JSC vs. Dong A Hotel |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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