Correlation Between Damsan JSC and Saigon Viendong
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Saigon Viendong 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 Viendong 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 Viendong Technology, you can compare the effects of market volatilities on Damsan JSC and Saigon Viendong 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 Viendong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Saigon Viendong.
Diversification Opportunities for Damsan JSC and Saigon Viendong
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Damsan and Saigon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Saigon Viendong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Viendong Tech 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 Viendong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Viendong Tech has no effect on the direction of Damsan JSC i.e., Damsan JSC and Saigon Viendong go up and down completely randomly.
Pair Corralation between Damsan JSC and Saigon Viendong
Assuming the 90 days trading horizon Damsan JSC is expected to generate 1.47 times more return on investment than Saigon Viendong. However, Damsan JSC is 1.47 times more volatile than Saigon Viendong Technology. It trades about 0.03 of its potential returns per unit of risk. Saigon Viendong Technology is currently generating about 0.01 per unit of risk. If you would invest 917,000 in Damsan JSC on September 1, 2024 and sell it today you would earn a total of 6,000 from holding Damsan JSC or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Damsan JSC vs. Saigon Viendong Technology
Performance |
| Timeline |
| Damsan JSC |
| Saigon Viendong Tech |
Damsan JSC and Saigon Viendong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Saigon Viendong
The main advantage of trading using opposite Damsan JSC and Saigon Viendong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Saigon Viendong 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 Viendong will offset losses from the drop in Saigon Viendong's long position.| Damsan JSC vs. FIT INVEST JSC | Damsan JSC vs. An Phat Plastic | Damsan JSC vs. Alphanam ME | Damsan JSC vs. APG Securities Joint |
| Saigon Viendong vs. FIT INVEST JSC | Saigon Viendong vs. Damsan JSC | Saigon Viendong vs. An Phat Plastic | Saigon Viendong vs. Alphanam ME |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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