Correlation Between Sea Air and Kien Giang
Can any of the company-specific risk be diversified away by investing in both Sea Air and Kien Giang 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 Sea Air and Kien Giang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea Air Freight and Kien Giang Construction, you can compare the effects of market volatilities on Sea Air and Kien Giang 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 Sea Air with a short position of Kien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea Air and Kien Giang.
Diversification Opportunities for Sea Air and Kien Giang
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sea and Kien is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sea Air Freight and Kien Giang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kien Giang Construction and Sea Air 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 Sea Air Freight are associated (or correlated) with Kien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kien Giang Construction has no effect on the direction of Sea Air i.e., Sea Air and Kien Giang go up and down completely randomly.
Pair Corralation between Sea Air and Kien Giang
Assuming the 90 days trading horizon Sea Air Freight is expected to under-perform the Kien Giang. But the stock apears to be less risky and, when comparing its historical volatility, Sea Air Freight is 1.07 times less risky than Kien Giang. The stock trades about -0.04 of its potential returns per unit of risk. The Kien Giang Construction is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,930,000 in Kien Giang Construction on December 4, 2024 and sell it today you would earn a total of 70,000 from holding Kien Giang Construction or generate 3.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sea Air Freight vs. Kien Giang Construction
Performance |
Timeline |
Sea Air Freight |
Kien Giang Construction |
Sea Air and Kien Giang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sea Air and Kien Giang
The main advantage of trading using opposite Sea Air and Kien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea Air position performs unexpectedly, Kien Giang 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 Kien Giang will offset losses from the drop in Kien Giang's long position.Sea Air vs. Hochiminh City Metal | Sea Air vs. Viet Thanh Plastic | Sea Air vs. Ducgiang Chemicals Detergent | Sea Air vs. Hanoi Beer Alcohol |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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