Correlation Between Hai An and Pha Le
Can any of the company-specific risk be diversified away by investing in both Hai An and Pha Le 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 Pha Le 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 Pha Le Plastics, you can compare the effects of market volatilities on Hai An and Pha Le 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 Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hai An and Pha Le.
Diversification Opportunities for Hai An and Pha Le
Pay attention - limited upside
The 3 months correlation between Hai and Pha is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics 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 Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of Hai An i.e., Hai An and Pha Le go up and down completely randomly.
Pair Corralation between Hai An and Pha Le
Assuming the 90 days trading horizon Hai An Transport is expected to generate 1.03 times more return on investment than Pha Le. However, Hai An is 1.03 times more volatile than Pha Le Plastics. It trades about 0.19 of its potential returns per unit of risk. Pha Le Plastics is currently generating about -0.04 per unit of risk. If you would invest 4,390,000 in Hai An Transport on September 1, 2024 and sell it today you would earn a total of 415,000 from holding Hai An Transport or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hai An Transport vs. Pha Le Plastics
Performance |
| Timeline |
| Hai An Transport |
| Pha Le Plastics |
Hai An and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hai An and Pha Le
The main advantage of trading using opposite Hai An and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hai An position performs unexpectedly, Pha Le 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 Pha Le will offset losses from the drop in Pha Le's long position.| Hai An vs. Viet Thanh Plastic | Hai An vs. Thong Nhat Rubber | Hai An vs. Dong Nai Plastic | Hai An vs. Fecon Mining JSC |
| Pha Le vs. Saigon Telecommunication Technologies | Pha Le vs. Tin Nghia Industrial | Pha Le vs. Transimex Transportation JSC | Pha Le vs. Thanh Dat Investment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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