Correlation Between Viet Thanh and Hai An
Can any of the company-specific risk be diversified away by investing in both Viet Thanh 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 Viet Thanh and Hai An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viet Thanh Plastic and Hai An Transport, you can compare the effects of market volatilities on Viet Thanh 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 Viet Thanh with a short position of Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Thanh and Hai An.
Diversification Opportunities for Viet Thanh and Hai An
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Viet and Hai is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic 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 Viet Thanh 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 Viet Thanh Plastic 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 Viet Thanh i.e., Viet Thanh and Hai An go up and down completely randomly.
Pair Corralation between Viet Thanh and Hai An
Assuming the 90 days trading horizon Viet Thanh Plastic is expected to generate 1.17 times more return on investment than Hai An. However, Viet Thanh is 1.17 times more volatile than Hai An Transport. It trades about 0.18 of its potential returns per unit of risk. Hai An Transport is currently generating about 0.08 per unit of risk. If you would invest 850,000 in Viet Thanh Plastic on September 3, 2024 and sell it today you would earn a total of 850,000 from holding Viet Thanh Plastic or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.33% |
| Values | Daily Returns |
Viet Thanh Plastic vs. Hai An Transport
Performance |
| Timeline |
| Viet Thanh Plastic |
| Hai An Transport |
Viet Thanh and Hai An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viet Thanh and Hai An
The main advantage of trading using opposite Viet Thanh and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Thanh 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.| Viet Thanh vs. FIT INVEST JSC | Viet Thanh vs. Damsan JSC | Viet Thanh vs. An Phat Plastic | Viet Thanh vs. Alphanam ME |
| Hai An vs. Riverway Management JSC | Hai An vs. Post and Telecommunications | Hai An vs. Kien Giang Construction | Hai An vs. Telecoms Informatics JSC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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