Correlation Between Hai An and Riverway Management
Can any of the company-specific risk be diversified away by investing in both Hai An and Riverway Management 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 Hai An and Riverway Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hai An Transport and Riverway Management JSC, you can compare the effects of market volatilities on Hai An and Riverway Management 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 Hai An with a short position of Riverway Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hai An and Riverway Management.
Diversification Opportunities for Hai An and Riverway Management
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hai and Riverway is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport and Riverway Management JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riverway Management JSC and Hai An 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 Hai An Transport are associated (or correlated) with Riverway Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riverway Management JSC has no effect on the direction of Hai An i.e., Hai An and Riverway Management go up and down completely randomly.
Pair Corralation between Hai An and Riverway Management
Assuming the 90 days trading horizon Hai An Transport is expected to generate 0.46 times more return on investment than Riverway Management. However, Hai An Transport is 2.19 times less risky than Riverway Management. It trades about 0.14 of its potential returns per unit of risk. Riverway Management JSC is currently generating about -0.05 per unit of risk. If you would invest 4,110,000 in Hai An Transport on August 28, 2024 and sell it today you would earn a total of 595,000 from holding Hai An Transport or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.26% |
| Values | Daily Returns |
Hai An Transport vs. Riverway Management JSC
Performance |
| Timeline |
| Hai An Transport |
| Riverway Management JSC |
Hai An and Riverway Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hai An and Riverway Management
The main advantage of trading using opposite Hai An and Riverway Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hai An position performs unexpectedly, Riverway Management 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 Riverway Management will offset losses from the drop in Riverway Management's long position.| Hai An vs. FIT INVEST JSC | Hai An vs. Damsan JSC | Hai An vs. An Phat Plastic | Hai An vs. APG Securities Joint |
| Riverway Management vs. FIT INVEST JSC | Riverway Management vs. Damsan JSC | Riverway Management vs. An Phat Plastic | Riverway Management vs. APG Securities Joint |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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