Correlation Between Danang Rubber and Transport
Can any of the company-specific risk be diversified away by investing in both Danang Rubber and Transport 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 Danang Rubber and Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danang Rubber JSC and Transport and Industry, you can compare the effects of market volatilities on Danang Rubber and Transport 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 Danang Rubber with a short position of Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danang Rubber and Transport.
Diversification Opportunities for Danang Rubber and Transport
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Danang and Transport is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Danang Rubber JSC and Transport and Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and Industry and Danang Rubber 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 Danang Rubber JSC are associated (or correlated) with Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport and Industry has no effect on the direction of Danang Rubber i.e., Danang Rubber and Transport go up and down completely randomly.
Pair Corralation between Danang Rubber and Transport
Assuming the 90 days trading horizon Danang Rubber JSC is expected to generate 0.56 times more return on investment than Transport. However, Danang Rubber JSC is 1.79 times less risky than Transport. It trades about 0.01 of its potential returns per unit of risk. Transport and Industry is currently generating about -0.04 per unit of risk. If you would invest 2,810,000 in Danang Rubber JSC on August 29, 2024 and sell it today you would earn a total of 5,000 from holding Danang Rubber JSC or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danang Rubber JSC vs. Transport and Industry
Performance |
| Timeline |
| Danang Rubber JSC |
| Transport and Industry |
Danang Rubber and Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danang Rubber and Transport
The main advantage of trading using opposite Danang Rubber and Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danang Rubber position performs unexpectedly, Transport 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 Transport will offset losses from the drop in Transport's long position.| Danang Rubber vs. FIT INVEST JSC | Danang Rubber vs. Damsan JSC | Danang Rubber vs. An Phat Plastic | Danang Rubber vs. APG Securities Joint |
| Transport vs. FIT INVEST JSC | Transport vs. Damsan JSC | Transport vs. An Phat Plastic | Transport 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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