Correlation Between Hai An and Pha Lai
Can any of the company-specific risk be diversified away by investing in both Hai An and Pha Lai 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 Lai 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 Lai Thermal, you can compare the effects of market volatilities on Hai An and Pha Lai 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 Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hai An and Pha Lai.
Diversification Opportunities for Hai An and Pha Lai
Very good diversification
The 3 months correlation between Hai and Pha is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport and Pha Lai Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Lai Thermal 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 Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Lai Thermal has no effect on the direction of Hai An i.e., Hai An and Pha Lai go up and down completely randomly.
Pair Corralation between Hai An and Pha Lai
Assuming the 90 days trading horizon Hai An Transport is expected to generate 1.54 times more return on investment than Pha Lai. However, Hai An is 1.54 times more volatile than Pha Lai Thermal. It trades about 0.08 of its potential returns per unit of risk. Pha Lai Thermal is currently generating about 0.01 per unit of risk. If you would invest 2,220,290 in Hai An Transport on October 25, 2024 and sell it today you would earn a total of 2,809,710 from holding Hai An Transport or generate 126.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hai An Transport vs. Pha Lai Thermal
Performance |
| Timeline |
| Hai An Transport |
| Pha Lai Thermal |
Hai An and Pha Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hai An and Pha Lai
The main advantage of trading using opposite Hai An and Pha Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hai An position performs unexpectedly, Pha Lai 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 Lai will offset losses from the drop in Pha Lai'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 |
| Pha Lai vs. Post and Telecommunications | Pha Lai vs. Saigon Telecommunication Technologies | Pha Lai vs. Phuoc Hoa Rubber | Pha Lai vs. Tay Ninh Rubber |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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