Correlation Between Damsan JSC and Viet Capital
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Viet Capital 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 Viet Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Viet Capital Securities, you can compare the effects of market volatilities on Damsan JSC and Viet Capital 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 Viet Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Viet Capital.
Diversification Opportunities for Damsan JSC and Viet Capital
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Damsan and Viet is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Viet Capital Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viet Capital Securities 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 Viet Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viet Capital Securities has no effect on the direction of Damsan JSC i.e., Damsan JSC and Viet Capital go up and down completely randomly.
Pair Corralation between Damsan JSC and Viet Capital
Assuming the 90 days trading horizon Damsan JSC is expected to generate 5.39 times less return on investment than Viet Capital. But when comparing it to its historical volatility, Damsan JSC is 1.35 times less risky than Viet Capital. It trades about 0.01 of its potential returns per unit of risk. Viet Capital Securities is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,856,892 in Viet Capital Securities on August 28, 2024 and sell it today you would earn a total of 1,493,108 from holding Viet Capital Securities or generate 80.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Viet Capital Securities
Performance |
| Timeline |
| Damsan JSC |
| Viet Capital Securities |
Damsan JSC and Viet Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Viet Capital
The main advantage of trading using opposite Damsan JSC and Viet Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Viet Capital 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 Viet Capital will offset losses from the drop in Viet Capital's long position.| Damsan JSC vs. FIT INVEST JSC | Damsan JSC vs. An Phat Plastic | Damsan JSC vs. APG Securities Joint | Damsan JSC vs. Binhthuan Agriculture Services |
| Viet Capital vs. FIT INVEST JSC | Viet Capital vs. Damsan JSC | Viet Capital vs. An Phat Plastic | Viet Capital vs. APG Securities Joint |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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