Correlation Between Damsan JSC and Alphanam

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

By analyzing existing cross correlation between Damsan JSC and Alphanam ME, you can compare the effects of market volatilities on Damsan JSC and Alphanam 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 Alphanam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and Alphanam.

Diversification Opportunities for Damsan JSC and Alphanam

0.64

Correlation Coefficient

Damsan JSC  Alphanam

Poor diversification

The 3 months correlation between Damsan and Alphanam is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and Alphanam ME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphanam ME 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 Alphanam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphanam ME has no effect on the direction of Damsan JSC i.e., Damsan JSC and Alphanam go up and down completely randomly.

Pair Corralation between Damsan JSC and Alphanam

Assuming the 90 days trading horizon Damsan JSC is expected to generate 4.94 times less return on investment than Alphanam. But when comparing it to its historical volatility, Damsan JSC is 2.73 times less risky than Alphanam. It trades about 0.14 of its potential returns per unit of risk. Alphanam ME is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  460,000  in Alphanam ME on May 6, 2025 and sell it today you would earn a total of  370,000  from holding Alphanam ME or generate 80.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	78.46%
Values	Daily Returns

Damsan JSC  vs.  Alphanam ME

Damsan JSC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Damsan JSC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Damsan JSC displayed solid returns over the last few months and may actually be approaching a breakup point.

Alphanam ME

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alphanam ME are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Alphanam displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Damsan JSC and Alphanam

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

The idea behind Damsan JSC and Alphanam ME 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.