Correlation Between Hai An and Sea Air
Can any of the company-specific risk be diversified away by investing in both Hai An and Sea Air 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 Sea Air 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 Sea Air Freight, you can compare the effects of market volatilities on Hai An and Sea Air 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 Sea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hai An and Sea Air.
Diversification Opportunities for Hai An and Sea Air
Excellent diversification
The 3 months correlation between Hai and Sea is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport and Sea Air Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Air Freight 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 Sea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Air Freight has no effect on the direction of Hai An i.e., Hai An and Sea Air go up and down completely randomly.
Pair Corralation between Hai An and Sea Air
Assuming the 90 days trading horizon Hai An Transport is expected to generate 1.63 times more return on investment than Sea Air. However, Hai An is 1.63 times more volatile than Sea Air Freight. It trades about 0.2 of its potential returns per unit of risk. Sea Air Freight is currently generating about -0.2 per unit of risk. If you would invest 4,210,000 in Hai An Transport on August 24, 2024 and sell it today you would earn a total of 430,000 from holding Hai An Transport or generate 10.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
Hai An Transport vs. Sea Air Freight
Performance |
| Timeline |
| Hai An Transport |
| Sea Air Freight |
Hai An and Sea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hai An and Sea Air
The main advantage of trading using opposite Hai An and Sea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hai An position performs unexpectedly, Sea Air 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 Sea Air will offset losses from the drop in Sea Air's long position.| Hai An vs. Dinhvu Port Investment | Hai An vs. Mobile World Investment | Hai An vs. LDG Investment JSC | Hai An vs. Danang Education Investment |
| Sea Air vs. FIT INVEST JSC | Sea Air vs. Damsan JSC | Sea Air vs. An Phat Plastic | Sea Air 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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