Correlation Between Techcom Vietnam and Hai An

Can any of the company-specific risk be diversified away by investing in both Techcom Vietnam 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 Techcom Vietnam and Hai An into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Techcom Vietnam REIT and Hai An Transport, you can compare the effects of market volatilities on Techcom Vietnam 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 Techcom Vietnam with a short position of Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techcom Vietnam and Hai An.

Diversification Opportunities for Techcom Vietnam and Hai An

-0.68

Correlation Coefficient

Techcom Vietnam  Hai An

Excellent diversification

The 3 months correlation between Techcom and Hai is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Techcom Vietnam REIT 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 Techcom Vietnam 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 Techcom Vietnam REIT 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 Techcom Vietnam i.e., Techcom Vietnam and Hai An go up and down completely randomly.

Pair Corralation between Techcom Vietnam and Hai An

Assuming the 90 days trading horizon Techcom Vietnam is expected to generate 93.33 times less return on investment than Hai An. In addition to that, Techcom Vietnam is 1.83 times more volatile than Hai An Transport. It trades about 0.0 of its total potential returns per unit of risk. Hai An Transport is currently generating about 0.22 per unit of volatility. If you would invest  3,900,000  in Hai An Transport on September 16, 2024 and sell it today you would earn a total of  1,040,000  from holding Hai An Transport or generate 26.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	74.24%
Values	Daily Returns

Techcom Vietnam REIT  vs.  Hai An Transport

Techcom Vietnam REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Techcom Vietnam REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Techcom Vietnam is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Hai An Transport

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hai An Transport are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Hai An displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Techcom Vietnam and Hai An

The main advantage of trading using opposite Techcom Vietnam and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techcom Vietnam 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.

The idea behind Techcom Vietnam REIT and Hai An Transport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.