Correlation Between Din Capital and Hai An
Can any of the company-specific risk be diversified away by investing in both Din Capital 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 Din Capital and Hai An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Din Capital Investment and Hai An Transport, you can compare the effects of market volatilities on Din Capital 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 Din Capital with a short position of Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Hai An.
Diversification Opportunities for Din Capital and Hai An
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Din and Hai is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment 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 Din Capital 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 Din Capital Investment 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 Din Capital i.e., Din Capital and Hai An go up and down completely randomly.
Pair Corralation between Din Capital and Hai An
Assuming the 90 days trading horizon Din Capital is expected to generate 6.15 times less return on investment than Hai An. In addition to that, Din Capital is 1.06 times more volatile than Hai An Transport. It trades about 0.01 of its total potential returns per unit of risk. Hai An Transport is currently generating about 0.08 per unit of volatility. If you would invest 2,484,058 in Hai An Transport on August 31, 2024 and sell it today you would earn a total of 2,280,942 from holding Hai An Transport or generate 91.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.09% |
| Values | Daily Returns |
Din Capital Investment vs. Hai An Transport
Performance |
| Timeline |
| Din Capital Investment |
| Hai An Transport |
Din Capital and Hai An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Din Capital and Hai An
The main advantage of trading using opposite Din Capital and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital 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.| Din Capital vs. FIT INVEST JSC | Din Capital vs. Damsan JSC | Din Capital vs. An Phat Plastic | Din Capital vs. Alphanam ME |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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