Correlation Between DOMESCO Medical and LDG Investment
Can any of the company-specific risk be diversified away by investing in both DOMESCO Medical and LDG Investment 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 LDG Investment 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 LDG Investment JSC, you can compare the effects of market volatilities on DOMESCO Medical and LDG Investment 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 LDG Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOMESCO Medical and LDG Investment.
Diversification Opportunities for DOMESCO Medical and LDG Investment
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DOMESCO and LDG is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding DOMESCO Medical Import and LDG Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LDG Investment JSC 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 LDG Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LDG Investment JSC has no effect on the direction of DOMESCO Medical i.e., DOMESCO Medical and LDG Investment go up and down completely randomly.
Pair Corralation between DOMESCO Medical and LDG Investment
Assuming the 90 days trading horizon DOMESCO Medical is expected to generate 4.37 times less return on investment than LDG Investment. In addition to that, DOMESCO Medical is 1.34 times more volatile than LDG Investment JSC. It trades about 0.01 of its total potential returns per unit of risk. LDG Investment JSC is currently generating about 0.08 per unit of volatility. If you would invest 189,000 in LDG Investment JSC on December 28, 2024 and sell it today you would earn a total of 16,000 from holding LDG Investment JSC or generate 8.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DOMESCO Medical Import vs. LDG Investment JSC
Performance |
Timeline |
DOMESCO Medical Import |
LDG Investment JSC |
DOMESCO Medical and LDG Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DOMESCO Medical and LDG Investment
The main advantage of trading using opposite DOMESCO Medical and LDG Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOMESCO Medical position performs unexpectedly, LDG Investment 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 LDG Investment will offset losses from the drop in LDG Investment's long position.DOMESCO Medical vs. Hanoi Beer Alcohol | DOMESCO Medical vs. Techno Agricultural Supplying | DOMESCO Medical vs. Elcom Technology Communications | DOMESCO Medical vs. Military Insurance Corp |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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