Correlation Between Damsan JSC and Vinhomes JSC
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Vinhomes JSC 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 Vinhomes JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and Vinhomes JSC, you can compare the effects of market volatilities on Damsan JSC and Vinhomes JSC 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 Vinhomes JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Vinhomes JSC.
Diversification Opportunities for Damsan JSC and Vinhomes JSC
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Damsan and Vinhomes is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Vinhomes JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinhomes JSC 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 Vinhomes JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinhomes JSC has no effect on the direction of Damsan JSC i.e., Damsan JSC and Vinhomes JSC go up and down completely randomly.
Pair Corralation between Damsan JSC and Vinhomes JSC
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Vinhomes JSC. In addition to that, Damsan JSC is 1.45 times more volatile than Vinhomes JSC. It trades about -0.06 of its total potential returns per unit of risk. Vinhomes JSC is currently generating about -0.01 per unit of volatility. If you would invest 4,420,000 in Vinhomes JSC on August 25, 2024 and sell it today you would lose (260,000) from holding Vinhomes JSC or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. Vinhomes JSC
Performance |
| Timeline |
| Damsan JSC |
| Vinhomes JSC |
Damsan JSC and Vinhomes JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and Vinhomes JSC
The main advantage of trading using opposite Damsan JSC and Vinhomes JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Vinhomes JSC 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 Vinhomes JSC will offset losses from the drop in Vinhomes JSC's long position.| Damsan JSC vs. Post and Telecommunications | Damsan JSC vs. Dinhvu Port Investment | Damsan JSC vs. Sea Air Freight | Damsan JSC vs. Vu Dang Investment |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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