Correlation Between Materials Petroleum and Hai An
Can any of the company-specific risk be diversified away by investing in both Materials Petroleum and Hai An 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 Materials Petroleum and Hai An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materials Petroleum JSC and Hai An Transport, you can compare the effects of market volatilities on Materials Petroleum and Hai An 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 Materials Petroleum with a short position of Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materials Petroleum and Hai An.
Diversification Opportunities for Materials Petroleum and Hai An
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Materials and Hai is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Materials Petroleum JSC and Hai An Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hai An Transport and Materials Petroleum 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 Materials Petroleum JSC are associated (or correlated) with Hai An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hai An Transport has no effect on the direction of Materials Petroleum i.e., Materials Petroleum and Hai An go up and down completely randomly.
Pair Corralation between Materials Petroleum and Hai An
Assuming the 90 days trading horizon Materials Petroleum JSC is expected to generate 2.96 times more return on investment than Hai An. However, Materials Petroleum is 2.96 times more volatile than Hai An Transport. It trades about 0.03 of its potential returns per unit of risk. Hai An Transport is currently generating about 0.05 per unit of risk. If you would invest 2,930,000 in Materials Petroleum JSC on October 30, 2024 and sell it today you would earn a total of 15,000 from holding Materials Petroleum JSC or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Materials Petroleum JSC vs. Hai An Transport
Performance |
| Timeline |
| Materials Petroleum JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Hai An Transport |
Materials Petroleum and Hai An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materials Petroleum and Hai An
The main advantage of trading using opposite Materials Petroleum and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materials Petroleum position performs unexpectedly, Hai An 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 Hai An will offset losses from the drop in Hai An's long position.| Materials Petroleum vs. Binh Duong Construction | Materials Petroleum vs. Song Hong Construction | Materials Petroleum vs. Riverway Management JSC | Materials Petroleum vs. Elcom Technology Communications |
| Hai An vs. PVI Reinsurance Corp | Hai An vs. HUD1 Investment and | Hai An vs. Vien Dong Investment | Hai An vs. Military Insurance Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |