Correlation Between MST Investment and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both MST Investment 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 MST Investment and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MST Investment JSC and Damsan JSC, you can compare the effects of market volatilities on MST Investment 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 MST Investment with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of MST Investment and Damsan JSC.
Diversification Opportunities for MST Investment and Damsan JSC
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MST and Damsan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding MST Investment JSC and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and MST Investment 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 MST Investment 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 MST Investment i.e., MST Investment and Damsan JSC go up and down completely randomly.
Pair Corralation between MST Investment and Damsan JSC
Assuming the 90 days trading horizon MST Investment JSC is expected to generate 1.34 times more return on investment than Damsan JSC. However, MST Investment is 1.34 times more volatile than Damsan JSC. It trades about 0.08 of its potential returns per unit of risk. Damsan JSC is currently generating about -0.11 per unit of risk. If you would invest 550,000 in MST Investment JSC on August 31, 2024 and sell it today you would earn a total of 40,000 from holding MST Investment JSC or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MST Investment JSC vs. Damsan JSC
Performance |
| Timeline |
| MST Investment JSC |
| Damsan JSC |
MST Investment and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MST Investment and Damsan JSC
The main advantage of trading using opposite MST Investment and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MST Investment 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.| MST Investment vs. Vu Dang Investment | MST Investment vs. 577 Investment Corp | MST Investment vs. Tienlen Steel Corp | MST Investment vs. Hanoi Beer Alcohol |
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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 Stocks Directory module to find actively traded stocks across global markets.
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