Correlation Between AgriBank Securities and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both AgriBank Securities and Damsan 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 AgriBank Securities and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AgriBank Securities JSC and Damsan JSC, you can compare the effects of market volatilities on AgriBank Securities and Damsan 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 AgriBank Securities with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgriBank Securities and Damsan JSC.
Diversification Opportunities for AgriBank Securities and Damsan JSC
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AgriBank and Damsan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding AgriBank Securities JSC and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and AgriBank Securities 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 AgriBank Securities JSC are associated (or correlated) with Damsan JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damsan JSC has no effect on the direction of AgriBank Securities i.e., AgriBank Securities and Damsan JSC go up and down completely randomly.
Pair Corralation between AgriBank Securities and Damsan JSC
Assuming the 90 days trading horizon AgriBank Securities JSC is expected to generate 1.19 times more return on investment than Damsan JSC. However, AgriBank Securities is 1.19 times more volatile than Damsan JSC. It trades about -0.14 of its potential returns per unit of risk. Damsan JSC is currently generating about -0.24 per unit of risk. If you would invest 1,930,000 in AgriBank Securities JSC on August 29, 2024 and sell it today you would lose (205,000) from holding AgriBank Securities JSC or give up 10.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AgriBank Securities JSC vs. Damsan JSC
Performance |
| Timeline |
| AgriBank Securities JSC |
| Damsan JSC |
AgriBank Securities and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AgriBank Securities and Damsan JSC
The main advantage of trading using opposite AgriBank Securities and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AgriBank Securities position performs unexpectedly, Damsan 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 Damsan JSC will offset losses from the drop in Damsan JSC's long position.| AgriBank Securities vs. FIT INVEST JSC | AgriBank Securities vs. Damsan JSC | AgriBank Securities vs. An Phat Plastic | AgriBank Securities vs. Alphanam ME |
| Damsan JSC vs. FIT INVEST JSC | Damsan JSC vs. An Phat Plastic | Damsan JSC vs. Alphanam ME | Damsan JSC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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