Correlation Between Da Nang and Transport
Can any of the company-specific risk be diversified away by investing in both Da Nang 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 Da Nang and Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Da Nang Construction and Transport and Industry, you can compare the effects of market volatilities on Da Nang 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 Da Nang with a short position of Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Nang and Transport.
Diversification Opportunities for Da Nang and Transport
Very good diversification
The 3 months correlation between DXV and Transport is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Da Nang Construction 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 Da Nang 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 Da Nang Construction 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 Da Nang i.e., Da Nang and Transport go up and down completely randomly.
Pair Corralation between Da Nang and Transport
Assuming the 90 days trading horizon Da Nang Construction is expected to generate 0.52 times more return on investment than Transport. However, Da Nang Construction is 1.93 times less risky than Transport. It trades about 0.03 of its potential returns per unit of risk. Transport and Industry is currently generating about -0.17 per unit of risk. If you would invest 380,000 in Da Nang Construction on October 25, 2024 and sell it today you would earn a total of 33,000 from holding Da Nang Construction or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Da Nang Construction vs. Transport and Industry
Performance |
| Timeline |
| Da Nang Construction |
| Transport and Industry |
Da Nang and Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Da Nang and Transport
The main advantage of trading using opposite Da Nang and Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Da Nang 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.| Da Nang vs. FIT INVEST JSC | Da Nang vs. Damsan JSC | Da Nang vs. An Phat Plastic | Da Nang 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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