Correlation Between Vietnam Airlines and Hai An
Can any of the company-specific risk be diversified away by investing in both Vietnam Airlines and Hai An 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 Vietnam Airlines and Hai An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Airlines JSC and Hai An Transport, you can compare the effects of market volatilities on Vietnam Airlines and Hai An 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 Vietnam Airlines with a short position of Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Airlines and Hai An.
Diversification Opportunities for Vietnam Airlines and Hai An
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vietnam and Hai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Airlines JSC and Hai An Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hai An Transport and Vietnam Airlines 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 Vietnam Airlines JSC are associated (or correlated) with Hai An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hai An Transport has no effect on the direction of Vietnam Airlines i.e., Vietnam Airlines and Hai An go up and down completely randomly.
Pair Corralation between Vietnam Airlines and Hai An
Assuming the 90 days trading horizon Vietnam Airlines is expected to generate 1.27 times less return on investment than Hai An. In addition to that, Vietnam Airlines is 1.15 times more volatile than Hai An Transport. It trades about 0.06 of its total potential returns per unit of risk. Hai An Transport is currently generating about 0.09 per unit of volatility. If you would invest 1,918,841 in Hai An Transport on September 4, 2024 and sell it today you would earn a total of 2,911,159 from holding Hai An Transport or generate 151.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Airlines JSC vs. Hai An Transport
Performance |
| Timeline |
| Vietnam Airlines JSC |
| Hai An Transport |
Vietnam Airlines and Hai An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Airlines and Hai An
The main advantage of trading using opposite Vietnam Airlines and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Airlines position performs unexpectedly, Hai An 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 Hai An will offset losses from the drop in Hai An's long position.| Vietnam Airlines vs. Alphanam ME | Vietnam Airlines vs. Hochiminh City Metal | Vietnam Airlines vs. Atesco Industrial Cartering | Vietnam Airlines vs. Danang Education 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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