Correlation Between Sao Ta and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both Sao Ta 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 Sao Ta and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sao Ta Foods and Damsan JSC, you can compare the effects of market volatilities on Sao Ta 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 Sao Ta with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Ta and Damsan JSC.
Diversification Opportunities for Sao Ta and Damsan JSC
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sao and Damsan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sao Ta Foods and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and Sao Ta 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 Sao Ta Foods 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 Sao Ta i.e., Sao Ta and Damsan JSC go up and down completely randomly.
Pair Corralation between Sao Ta and Damsan JSC
Assuming the 90 days trading horizon Sao Ta Foods is expected to generate 0.62 times more return on investment than Damsan JSC. However, Sao Ta Foods is 1.61 times less risky than Damsan JSC. It trades about 0.07 of its potential returns per unit of risk. Damsan JSC is currently generating about 0.02 per unit of risk. If you would invest 3,071,887 in Sao Ta Foods on September 12, 2024 and sell it today you would earn a total of 1,758,113 from holding Sao Ta Foods or generate 57.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sao Ta Foods vs. Damsan JSC
Performance |
| Timeline |
| Sao Ta Foods |
| Damsan JSC |
Sao Ta and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sao Ta and Damsan JSC
The main advantage of trading using opposite Sao Ta and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sao Ta 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.| Sao Ta vs. Development Investment Construction | Sao Ta vs. Viettel Construction JSC | Sao Ta vs. Vu Dang Investment | Sao Ta vs. Ha Long Investment |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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