Correlation Between DOMESCO Medical and Duong Hieu

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Can any of the company-specific risk be diversified away by investing in both DOMESCO Medical and Duong Hieu 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 DOMESCO Medical and Duong Hieu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DOMESCO Medical Import and Duong Hieu Trading, you can compare the effects of market volatilities on DOMESCO Medical and Duong Hieu 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 DOMESCO Medical with a short position of Duong Hieu. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOMESCO Medical and Duong Hieu.

Diversification Opportunities for DOMESCO Medical and Duong Hieu

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between DOMESCO and Duong is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding DOMESCO Medical Import and Duong Hieu Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duong Hieu Trading and DOMESCO Medical 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 DOMESCO Medical Import are associated (or correlated) with Duong Hieu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duong Hieu Trading has no effect on the direction of DOMESCO Medical i.e., DOMESCO Medical and Duong Hieu go up and down completely randomly.

Pair Corralation between DOMESCO Medical and Duong Hieu

Assuming the 90 days trading horizon DOMESCO Medical Import is expected to generate 0.78 times more return on investment than Duong Hieu. However, DOMESCO Medical Import is 1.29 times less risky than Duong Hieu. It trades about 0.07 of its potential returns per unit of risk. Duong Hieu Trading is currently generating about 0.01 per unit of risk. If you would invest  5,968,929  in DOMESCO Medical Import on September 27, 2024 and sell it today you would earn a total of  821,071  from holding DOMESCO Medical Import or generate 13.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy84.13%
ValuesDaily Returns

DOMESCO Medical Import  vs.  Duong Hieu Trading

 Performance 
       Timeline  
DOMESCO Medical Import 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days DOMESCO Medical Import has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, DOMESCO Medical is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Duong Hieu Trading 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Duong Hieu Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Duong Hieu is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

DOMESCO Medical and Duong Hieu Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DOMESCO Medical and Duong Hieu

The main advantage of trading using opposite DOMESCO Medical and Duong Hieu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOMESCO Medical position performs unexpectedly, Duong Hieu 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 Duong Hieu will offset losses from the drop in Duong Hieu's long position.
The idea behind DOMESCO Medical Import and Duong Hieu Trading 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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