Correlation Between Damsan JSC and Saigon Machinery
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Saigon Machinery 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 Saigon Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Saigon Machinery Spare, you can compare the effects of market volatilities on Damsan JSC and Saigon Machinery 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 Saigon Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Saigon Machinery.
Diversification Opportunities for Damsan JSC and Saigon Machinery
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Damsan and Saigon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Saigon Machinery Spare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Machinery Spare 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 Saigon Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Machinery Spare has no effect on the direction of Damsan JSC i.e., Damsan JSC and Saigon Machinery go up and down completely randomly.
Pair Corralation between Damsan JSC and Saigon Machinery
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Saigon Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Damsan JSC is 2.14 times less risky than Saigon Machinery. The stock trades about -0.04 of its potential returns per unit of risk. The Saigon Machinery Spare is currently generating about 1.03 of returns per unit of risk over similar time horizon. If you would invest 1,090,000 in Saigon Machinery Spare on October 16, 2024 and sell it today you would earn a total of 510,000 from holding Saigon Machinery Spare or generate 46.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
Damsan JSC vs. Saigon Machinery Spare
Performance |
| Timeline |
| Damsan JSC |
| Saigon Machinery Spare |
Damsan JSC and Saigon Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Saigon Machinery
The main advantage of trading using opposite Damsan JSC and Saigon Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Saigon Machinery 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 Saigon Machinery will offset losses from the drop in Saigon Machinery's long position.| Damsan JSC vs. Post and Telecommunications | Damsan JSC vs. PetroVietnam Transportation Corp | Damsan JSC vs. Sao Ta Foods | Damsan JSC vs. Military Insurance Corp |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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