Correlation Between Hai An and Vnsteel Vicasa
Can any of the company-specific risk be diversified away by investing in both Hai An and Vnsteel Vicasa 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 Vnsteel Vicasa 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 Vnsteel Vicasa JSC, you can compare the effects of market volatilities on Hai An and Vnsteel Vicasa 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 Vnsteel Vicasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hai An and Vnsteel Vicasa.
Diversification Opportunities for Hai An and Vnsteel Vicasa
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hai and Vnsteel is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport and Vnsteel Vicasa JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vnsteel Vicasa 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 Vnsteel Vicasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vnsteel Vicasa JSC has no effect on the direction of Hai An i.e., Hai An and Vnsteel Vicasa go up and down completely randomly.
Pair Corralation between Hai An and Vnsteel Vicasa
Assuming the 90 days trading horizon Hai An is expected to generate 33.01 times less return on investment than Vnsteel Vicasa. But when comparing it to its historical volatility, Hai An Transport is 1.86 times less risky than Vnsteel Vicasa. It trades about 0.07 of its potential returns per unit of risk. Vnsteel Vicasa JSC is currently generating about 1.26 of returns per unit of risk over similar time horizon. If you would invest 830,000 in Vnsteel Vicasa JSC on September 15, 2024 and sell it today you would earn a total of 810,000 from holding Vnsteel Vicasa JSC or generate 97.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 63.64% |
| Values | Daily Returns |
Hai An Transport vs. Vnsteel Vicasa JSC
Performance |
| Timeline |
| Hai An Transport |
| Vnsteel Vicasa JSC |
Hai An and Vnsteel Vicasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hai An and Vnsteel Vicasa
The main advantage of trading using opposite Hai An and Vnsteel Vicasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hai An position performs unexpectedly, Vnsteel Vicasa 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 Vnsteel Vicasa will offset losses from the drop in Vnsteel Vicasa's long position.| Hai An vs. Vietnam Technological And | Hai An vs. Tri Viet Management | Hai An vs. LDG Investment JSC | Hai An vs. PV2 Investment JSC |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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