Correlation Between Sao Vang and Hai An
Can any of the company-specific risk be diversified away by investing in both Sao Vang 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 Sao Vang and Hai An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sao Vang Rubber and Hai An Transport, you can compare the effects of market volatilities on Sao Vang 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 Sao Vang with a short position of Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Vang and Hai An.
Diversification Opportunities for Sao Vang and Hai An
Pay attention - limited upside
The 3 months correlation between Sao and Hai is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sao Vang Rubber 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 Sao Vang 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 Sao Vang Rubber 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 Sao Vang i.e., Sao Vang and Hai An go up and down completely randomly.
Pair Corralation between Sao Vang and Hai An
Assuming the 90 days trading horizon Sao Vang Rubber is expected to under-perform the Hai An. In addition to that, Sao Vang is 1.82 times more volatile than Hai An Transport. It trades about -0.03 of its total potential returns per unit of risk. Hai An Transport is currently generating about 0.05 per unit of volatility. If you would invest 4,280,000 in Hai An Transport on August 31, 2024 and sell it today you would earn a total of 525,000 from holding Hai An Transport or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 69.53% |
| Values | Daily Returns |
Sao Vang Rubber vs. Hai An Transport
Performance |
| Timeline |
| Sao Vang Rubber |
| Hai An Transport |
Sao Vang and Hai An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sao Vang and Hai An
The main advantage of trading using opposite Sao Vang and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sao Vang 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.| Sao Vang vs. Mobile World Investment | Sao Vang vs. Transimex Transportation JSC | Sao Vang vs. Petrolimex Information Technology | Sao Vang vs. Development Investment Construction |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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