Correlation Between Vietnam Airlines and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both Vietnam Airlines 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 Vietnam Airlines and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Airlines JSC and Damsan JSC, you can compare the effects of market volatilities on Vietnam Airlines 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 Vietnam Airlines with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Airlines and Damsan JSC.
Diversification Opportunities for Vietnam Airlines and Damsan JSC
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vietnam and Damsan is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Airlines JSC and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and Vietnam Airlines 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 Vietnam Airlines JSC 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 Vietnam Airlines i.e., Vietnam Airlines and Damsan JSC go up and down completely randomly.
Pair Corralation between Vietnam Airlines and Damsan JSC
Assuming the 90 days trading horizon Vietnam Airlines JSC is expected to generate 1.18 times more return on investment than Damsan JSC. However, Vietnam Airlines is 1.18 times more volatile 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 1,345,000 in Vietnam Airlines JSC on September 12, 2024 and sell it today you would earn a total of 1,425,000 from holding Vietnam Airlines JSC or generate 105.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Airlines JSC vs. Damsan JSC
Performance |
| Timeline |
| Vietnam Airlines JSC |
| Damsan JSC |
Vietnam Airlines and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Airlines and Damsan JSC
The main advantage of trading using opposite Vietnam Airlines and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Airlines 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.| Vietnam Airlines vs. Song Hong Garment | Vietnam Airlines vs. Alphanam ME | Vietnam Airlines vs. Hochiminh City Metal | Vietnam Airlines vs. Atesco Industrial Cartering |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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