Correlation Between Kien Giang and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both Kien Giang 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 Kien Giang and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kien Giang Construction and Damsan JSC, you can compare the effects of market volatilities on Kien Giang 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 Kien Giang with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kien Giang and Damsan JSC.
Diversification Opportunities for Kien Giang and Damsan JSC
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kien and Damsan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kien Giang Construction and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and Kien Giang 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 Kien Giang Construction 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 Kien Giang i.e., Kien Giang and Damsan JSC go up and down completely randomly.
Pair Corralation between Kien Giang and Damsan JSC
Assuming the 90 days trading horizon Kien Giang Construction is expected to under-perform the Damsan JSC. But the stock apears to be less risky and, when comparing its historical volatility, Kien Giang Construction is 1.02 times less risky than Damsan JSC. The stock trades about -0.18 of its potential returns per unit of risk. The Damsan JSC is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 995,000 in Damsan JSC on September 3, 2024 and sell it today you would lose (72,000) from holding Damsan JSC or give up 7.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kien Giang Construction vs. Damsan JSC
Performance |
| Timeline |
| Kien Giang Construction |
| Damsan JSC |
Kien Giang and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kien Giang and Damsan JSC
The main advantage of trading using opposite Kien Giang and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kien Giang 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.| Kien Giang vs. FIT INVEST JSC | Kien Giang vs. Damsan JSC | Kien Giang vs. An Phat Plastic | Kien Giang 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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