Correlation Between DHG Pharmaceutical and Investment
Can any of the company-specific risk be diversified away by investing in both DHG Pharmaceutical and Investment 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 DHG Pharmaceutical and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DHG Pharmaceutical JSC and Investment and Industrial, you can compare the effects of market volatilities on DHG Pharmaceutical and Investment 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 DHG Pharmaceutical with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DHG Pharmaceutical and Investment.
Diversification Opportunities for DHG Pharmaceutical and Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DHG and Investment is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding DHG Pharmaceutical JSC and Investment and Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Industrial and DHG Pharmaceutical 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 DHG Pharmaceutical JSC are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment and Industrial has no effect on the direction of DHG Pharmaceutical i.e., DHG Pharmaceutical and Investment go up and down completely randomly.
Pair Corralation between DHG Pharmaceutical and Investment
Assuming the 90 days trading horizon DHG Pharmaceutical JSC is expected to under-perform the Investment. But the stock apears to be less risky and, when comparing its historical volatility, DHG Pharmaceutical JSC is 1.66 times less risky than Investment. The stock trades about -0.1 of its potential returns per unit of risk. The Investment and Industrial is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 7,032,954 in Investment and Industrial on September 12, 2024 and sell it today you would lose (232,954) from holding Investment and Industrial or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
DHG Pharmaceutical JSC vs. Investment and Industrial
Performance |
| Timeline |
| DHG Pharmaceutical JSC |
| Investment and Industrial |
DHG Pharmaceutical and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DHG Pharmaceutical and Investment
The main advantage of trading using opposite DHG Pharmaceutical and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DHG Pharmaceutical position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| DHG Pharmaceutical vs. Nafoods Group JSC | DHG Pharmaceutical vs. Post and Telecommunications | DHG Pharmaceutical vs. Travel Investment and | DHG Pharmaceutical vs. Bao Ngoc Investment |
| Investment vs. BIDV Insurance Corp | Investment vs. Vnsteel Vicasa JSC | Investment vs. Vina2 Investment and | Investment vs. HUD1 Investment and |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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