Correlation Between Hai An and Vincom Retail

Can any of the company-specific risk be diversified away by investing in both Hai An and Vincom Retail 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 Vincom Retail 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 Vincom Retail JSC, you can compare the effects of market volatilities on Hai An and Vincom Retail 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 Vincom Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hai An and Vincom Retail.

Diversification Opportunities for Hai An and Vincom Retail

-0.12

Correlation Coefficient

Hai An  Vincom Retail

Good diversification

The 3 months correlation between Hai and Vincom is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hai An Transport and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC 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 Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of Hai An i.e., Hai An and Vincom Retail go up and down completely randomly.

Pair Corralation between Hai An and Vincom Retail

Assuming the 90 days trading horizon Hai An is expected to generate 1.66 times less return on investment than Vincom Retail. In addition to that, Hai An is 1.21 times more volatile than Vincom Retail JSC. It trades about 0.08 of its total potential returns per unit of risk. Vincom Retail JSC is currently generating about 0.16 per unit of volatility. If you would invest  1,715,000  in Vincom Retail JSC on December 29, 2024 and sell it today you would earn a total of  231,000  from holding Vincom Retail JSC or generate 13.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hai An Transport  vs.  Vincom Retail JSC

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.

Vincom Retail JSC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vincom Retail JSC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Vincom Retail displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hai An and Vincom Retail

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

The idea behind Hai An Transport and Vincom Retail JSC 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .