Correlation Between Damsan JSC and Saigon Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Damsan JSC and Saigon Telecommunicatio 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 Damsan JSC and Saigon Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Damsan JSC and Saigon Telecommunication Technologies, you can compare the effects of market volatilities on Damsan JSC and Saigon Telecommunicatio 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 Damsan JSC with a short position of Saigon Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Saigon Telecommunicatio.

Diversification Opportunities for Damsan JSC and Saigon Telecommunicatio

0.02

Correlation Coefficient

Damsan JSC  Saigon Telecommunicatio

Significant diversification

The 3 months correlation between Damsan and Saigon is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio and Damsan JSC 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 Damsan JSC are associated (or correlated) with Saigon Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Telecommunicatio has no effect on the direction of Damsan JSC i.e., Damsan JSC and Saigon Telecommunicatio go up and down completely randomly.

Pair Corralation between Damsan JSC and Saigon Telecommunicatio

Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the Saigon Telecommunicatio. In addition to that, Damsan JSC is 1.06 times more volatile than Saigon Telecommunication Technologies. It trades about -0.05 of its total potential returns per unit of risk. Saigon Telecommunication Technologies is currently generating about 0.01 per unit of volatility. If you would invest  1,510,000  in Saigon Telecommunication Technologies on September 12, 2024 and sell it today you would lose (30,000) from holding Saigon Telecommunication Technologies or give up 1.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Damsan JSC  vs.  Saigon Telecommunication Techn

Damsan JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Damsan JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Saigon Telecommunicatio

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Saigon Telecommunication Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Saigon Telecommunicatio is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Damsan JSC and Saigon Telecommunicatio

The main advantage of trading using opposite Damsan JSC and Saigon Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, Saigon Telecommunicatio 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 Saigon Telecommunicatio will offset losses from the drop in Saigon Telecommunicatio's long position.

The idea behind Damsan JSC and Saigon Telecommunication Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.