Correlation Between Vu Dang and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both Vu Dang 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 Vu Dang and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vu Dang Investment and Damsan JSC, you can compare the effects of market volatilities on Vu Dang 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 Vu Dang with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and Damsan JSC.
Diversification Opportunities for Vu Dang and Damsan JSC
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SVD and Damsan is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and Vu Dang 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 Vu Dang Investment 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 Vu Dang i.e., Vu Dang and Damsan JSC go up and down completely randomly.
Pair Corralation between Vu Dang and Damsan JSC
Assuming the 90 days trading horizon Vu Dang Investment is expected to generate 3.51 times more return on investment than Damsan JSC. However, Vu Dang is 3.51 times more volatile than Damsan JSC. It trades about -0.02 of its potential returns per unit of risk. Damsan JSC is currently generating about -0.28 per unit of risk. If you would invest 323,000 in Vu Dang Investment on August 29, 2024 and sell it today you would lose (7,000) from holding Vu Dang Investment or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vu Dang Investment vs. Damsan JSC
Performance |
| Timeline |
| Vu Dang Investment |
| Damsan JSC |
Vu Dang and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vu Dang and Damsan JSC
The main advantage of trading using opposite Vu Dang and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vu Dang 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.| Vu Dang vs. FIT INVEST JSC | Vu Dang vs. Damsan JSC | Vu Dang vs. An Phat Plastic | Vu Dang vs. APG Securities Joint |
| Damsan JSC vs. Fecon Mining JSC | Damsan JSC vs. Saigon Telecommunication Technologies | Damsan JSC vs. Investment and Industrial | Damsan JSC vs. VTC Telecommunications JSC |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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