Correlation Between SSI Securities and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both SSI Securities 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 SSI Securities and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSI Securities Corp and Damsan JSC, you can compare the effects of market volatilities on SSI Securities 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 SSI Securities with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSI Securities and Damsan JSC.
Diversification Opportunities for SSI Securities and Damsan JSC
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SSI and Damsan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SSI Securities Corp and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and SSI Securities 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 SSI Securities Corp 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 SSI Securities i.e., SSI Securities and Damsan JSC go up and down completely randomly.
Pair Corralation between SSI Securities and Damsan JSC
Assuming the 90 days trading horizon SSI Securities Corp is expected to under-perform the Damsan JSC. But the stock apears to be less risky and, when comparing its historical volatility, SSI Securities Corp is 1.21 times less risky than Damsan JSC. The stock trades about -0.22 of its potential returns per unit of risk. The Damsan JSC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 910,000 in Damsan JSC on August 31, 2024 and sell it today you would earn a total of 13,000 from holding Damsan JSC or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSI Securities Corp vs. Damsan JSC
Performance |
| Timeline |
| SSI Securities Corp |
| Damsan JSC |
SSI Securities and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSI Securities and Damsan JSC
The main advantage of trading using opposite SSI Securities and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSI Securities 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.| SSI Securities vs. Sao Ta Foods | SSI Securities vs. DOMESCO Medical Import | SSI Securities vs. Kien Giang Construction | SSI Securities vs. Song Hong Aluminum |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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