Correlation Between Damsan JSC and SMC Investment
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and SMC Investment 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 SMC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and SMC Investment Trading, you can compare the effects of market volatilities on Damsan JSC and SMC Investment 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 SMC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and SMC Investment.
Diversification Opportunities for Damsan JSC and SMC Investment
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Damsan and SMC is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and SMC Investment Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Investment Trading 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 SMC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Investment Trading has no effect on the direction of Damsan JSC i.e., Damsan JSC and SMC Investment go up and down completely randomly.
Pair Corralation between Damsan JSC and SMC Investment
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the SMC Investment. But the stock apears to be less risky and, when comparing its historical volatility, Damsan JSC is 1.45 times less risky than SMC Investment. The stock trades about -0.06 of its potential returns per unit of risk. The SMC Investment Trading is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,035,000 in SMC Investment Trading on October 12, 2024 and sell it today you would lose (269,000) from holding SMC Investment Trading or give up 25.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. SMC Investment Trading
Performance |
| Timeline |
| Damsan JSC |
| SMC Investment Trading |
Damsan JSC and SMC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and SMC Investment
The main advantage of trading using opposite Damsan JSC and SMC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, SMC Investment 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 SMC Investment will offset losses from the drop in SMC Investment's long position.| Damsan JSC vs. Binh Duong Trade | Damsan JSC vs. Construction And Investment | Damsan JSC vs. MST Investment JSC | Damsan JSC vs. FPT Digital Retail |
| SMC Investment vs. Elcom Technology Communications | SMC Investment vs. Petrolimex Petrochemical JSC | SMC Investment vs. Pha Le Plastics | SMC Investment vs. Sao Vang Rubber |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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