Correlation Between Hai An and Post

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

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

Diversification Opportunities for Hai An and Post

0.17

Correlation Coefficient

Hai An  Post

Average diversification

The 3 months correlation between Hai and Post is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni and Hai An 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 Hai An Transport are associated (or correlated) with Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of Hai An i.e., Hai An and Post go up and down completely randomly.

Pair Corralation between Hai An and Post

Assuming the 90 days trading horizon Hai An is expected to generate 3.14 times less return on investment than Post. But when comparing it to its historical volatility, Hai An Transport is 1.82 times less risky than Post. It trades about 0.08 of its potential returns per unit of risk. Post and Telecommunications is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  459,000  in Post and Telecommunications on December 27, 2024 and sell it today you would earn a total of  108,000  from holding Post and Telecommunications or generate 23.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Hai An Transport  vs.  Post and Telecommunications

Hai An Transport

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hai An Transport are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Hai An may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Post and Telecommuni

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Post and Telecommunications are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Post displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hai An and Post

The main advantage of trading using opposite Hai An and Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hai An position performs unexpectedly, Post 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 Post will offset losses from the drop in Post's long position.

The idea behind Hai An Transport and Post and Telecommunications 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 Stocks Directory module to find actively traded stocks across global markets.