Correlation Between Alphanam and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both Alphanam 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 Alphanam and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Damsan JSC, you can compare the effects of market volatilities on Alphanam 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 Alphanam with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Damsan JSC.
Diversification Opportunities for Alphanam and Damsan JSC
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphanam and Damsan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and Alphanam 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 Alphanam ME 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 Alphanam i.e., Alphanam and Damsan JSC go up and down completely randomly.
Pair Corralation between Alphanam and Damsan JSC
Assuming the 90 days trading horizon Alphanam ME is expected to generate 2.8 times more return on investment than Damsan JSC. However, Alphanam is 2.8 times more volatile than Damsan JSC. It trades about 0.45 of its potential returns per unit of risk. Damsan JSC is currently generating about -0.31 per unit of risk. If you would invest 450,000 in Alphanam ME on November 2, 2024 and sell it today you would earn a total of 30,000 from holding Alphanam ME or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 27.78% |
| Values | Daily Returns |
Alphanam ME vs. Damsan JSC
Performance |
| Timeline |
| Alphanam ME |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Damsan JSC |
Alphanam and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Damsan JSC
The main advantage of trading using opposite Alphanam and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam 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.| Alphanam vs. Visicons Construction and | Alphanam vs. DIC Holdings Construction | Alphanam vs. Vu Dang Investment | Alphanam vs. Hai An Transport |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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