Correlation Between 577 Investment and Hai An
Can any of the company-specific risk be diversified away by investing in both 577 Investment 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 577 Investment and Hai An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 577 Investment Corp and Hai An Transport, you can compare the effects of market volatilities on 577 Investment 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 577 Investment with a short position of Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of 577 Investment and Hai An.
Diversification Opportunities for 577 Investment and Hai An
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 577 and Hai is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding 577 Investment Corp 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 577 Investment 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 577 Investment Corp 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 577 Investment i.e., 577 Investment and Hai An go up and down completely randomly.
Pair Corralation between 577 Investment and Hai An
Assuming the 90 days trading horizon 577 Investment Corp is expected to under-perform the Hai An. But the stock apears to be less risky and, when comparing its historical volatility, 577 Investment Corp is 2.01 times less risky than Hai An. The stock trades about -0.18 of its potential returns per unit of risk. The Hai An Transport is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,670,000 in Hai An Transport on September 13, 2024 and sell it today you would earn a total of 320,000 from holding Hai An Transport or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
577 Investment Corp vs. Hai An Transport
Performance |
| Timeline |
| 577 Investment Corp |
| Hai An Transport |
577 Investment and Hai An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 577 Investment and Hai An
The main advantage of trading using opposite 577 Investment and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 577 Investment 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.| 577 Investment vs. South Basic Chemicals | 577 Investment vs. Post and Telecommunications | 577 Investment vs. Pacific Petroleum Transportation | 577 Investment vs. DOMESCO Medical Import |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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