Correlation Between Damsan JSC and Petrolimex Petrochemical
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Petrolimex Petrochemical 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 Petrochemical 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 Petrochemical JSC, you can compare the effects of market volatilities on Damsan JSC and Petrolimex Petrochemical 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 Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Petrolimex Petrochemical.
Diversification Opportunities for Damsan JSC and Petrolimex Petrochemical
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Damsan and Petrolimex is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Petrolimex Petrochemical JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Petrochemical 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 Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Petrochemical has no effect on the direction of Damsan JSC i.e., Damsan JSC and Petrolimex Petrochemical go up and down completely randomly.
Pair Corralation between Damsan JSC and Petrolimex Petrochemical
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Petrolimex Petrochemical. But the stock apears to be less risky and, when comparing its historical volatility, Damsan JSC is 2.24 times less risky than Petrolimex Petrochemical. The stock trades about -0.29 of its potential returns per unit of risk. The Petrolimex Petrochemical JSC is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,270,000 in Petrolimex Petrochemical JSC on October 29, 2024 and sell it today you would earn a total of 190,000 from holding Petrolimex Petrochemical JSC or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Damsan JSC vs. Petrolimex Petrochemical JSC
Performance |
| Timeline |
| Damsan JSC |
| Petrolimex Petrochemical |
Damsan JSC and Petrolimex Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Petrolimex Petrochemical
The main advantage of trading using opposite Damsan JSC and Petrolimex Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Petrolimex Petrochemical 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 Petrochemical will offset losses from the drop in Petrolimex Petrochemical's long position.| Damsan JSC vs. POST TELECOMMU | Damsan JSC vs. Vietnam Technological And | Damsan JSC vs. Elcom Technology Communications | Damsan JSC vs. Asia Commercial Bank |
| Petrolimex Petrochemical vs. Pha Le Plastics | Petrolimex Petrochemical vs. Century Synthetic Fiber | Petrolimex Petrochemical vs. Phuoc Hoa Rubber | Petrolimex Petrochemical vs. Danang Rubber JSC |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| CEOs Directory Screen CEOs from public companies around the world |