Correlation Between Sea Air and Tien Giang

Can any of the company-specific risk be diversified away by investing in both Sea Air and Tien 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 Tien 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 Tien Giang Investment, you can compare the effects of market volatilities on Sea Air and Tien 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 Tien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea Air and Tien Giang.

Diversification Opportunities for Sea Air and Tien Giang

-0.52

Correlation Coefficient

Sea Air  Tien Giang

Excellent diversification

The 3 months correlation between Sea and Tien is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sea Air Freight and Tien Giang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Giang Investment 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 Tien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Giang Investment has no effect on the direction of Sea Air i.e., Sea Air and Tien Giang go up and down completely randomly.

Pair Corralation between Sea Air and Tien Giang

Assuming the 90 days trading horizon Sea Air Freight is expected to under-perform the Tien Giang. In addition to that, Sea Air is 1.0 times more volatile than Tien Giang Investment. It trades about -0.03 of its total potential returns per unit of risk. Tien Giang Investment is currently generating about 0.44 per unit of volatility. If you would invest  4,362,000  in Tien Giang Investment on October 12, 2024 and sell it today you would earn a total of  563,000  from holding Tien Giang Investment or generate 12.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Sea Air Freight  vs.  Tien Giang Investment

Sea Air Freight

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sea Air Freight has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Sea Air is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Tien Giang Investment

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tien Giang Investment are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Tien Giang displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sea Air and Tien Giang

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

The idea behind Sea Air Freight and Tien Giang Investment 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..