Correlation Between Hai An and Tay Ninh
Can any of the company-specific risk be diversified away by investing in both Hai An and Tay Ninh 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 Tay Ninh 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 Tay Ninh Rubber, you can compare the effects of market volatilities on Hai An and Tay Ninh 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 Tay Ninh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hai An and Tay Ninh.
Diversification Opportunities for Hai An and Tay Ninh
Almost no diversification
The 3 months correlation between Hai and Tay is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport and Tay Ninh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tay Ninh Rubber 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 Tay Ninh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tay Ninh Rubber has no effect on the direction of Hai An i.e., Hai An and Tay Ninh go up and down completely randomly.
Pair Corralation between Hai An and Tay Ninh
Assuming the 90 days trading horizon Hai An is expected to generate 1.06 times less return on investment than Tay Ninh. But when comparing it to its historical volatility, Hai An Transport is 1.19 times less risky than Tay Ninh. It trades about 0.25 of its potential returns per unit of risk. Tay Ninh Rubber is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,970,000 in Tay Ninh Rubber on September 12, 2024 and sell it today you would earn a total of 1,260,000 from holding Tay Ninh Rubber or generate 31.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hai An Transport vs. Tay Ninh Rubber
Performance |
| Timeline |
| Hai An Transport |
| Tay Ninh Rubber |
Hai An and Tay Ninh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hai An and Tay Ninh
The main advantage of trading using opposite Hai An and Tay Ninh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hai An position performs unexpectedly, Tay Ninh 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 Tay Ninh will offset losses from the drop in Tay Ninh's long position.| Hai An vs. Vina2 Investment and | Hai An vs. Vu Dang Investment | Hai An vs. VTC Telecommunications JSC | Hai An vs. Tng Investment And |
| Tay Ninh vs. Vinhomes JSC | Tay Ninh vs. SCG Construction JSC | Tay Ninh vs. Binh Duong Construction | Tay Ninh vs. Cotec Construction JSC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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