Correlation Between An Phat and Tien Son
Can any of the company-specific risk be diversified away by investing in both An Phat and Tien Son 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 An Phat and Tien Son into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between An Phat Plastic and Tien Son Thanh, you can compare the effects of market volatilities on An Phat and Tien Son 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 An Phat with a short position of Tien Son. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Tien Son.
Diversification Opportunities for An Phat and Tien Son
Very poor diversification
The 3 months correlation between AAA and Tien is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Tien Son Thanh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Son Thanh and An Phat 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 An Phat Plastic are associated (or correlated) with Tien Son. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Son Thanh has no effect on the direction of An Phat i.e., An Phat and Tien Son go up and down completely randomly.
Pair Corralation between An Phat and Tien Son
Assuming the 90 days trading horizon An Phat Plastic is expected to generate 1.0 times more return on investment than Tien Son. However, An Phat is 1.0 times more volatile than Tien Son Thanh. It trades about 0.02 of its potential returns per unit of risk. Tien Son Thanh is currently generating about -0.04 per unit of risk. If you would invest 741,000 in An Phat Plastic on August 30, 2024 and sell it today you would earn a total of 109,000 from holding An Phat Plastic or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
An Phat Plastic vs. Tien Son Thanh
Performance |
| Timeline |
| An Phat Plastic |
| Tien Son Thanh |
An Phat and Tien Son Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and Tien Son
The main advantage of trading using opposite An Phat and Tien Son positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Tien Son 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 Son will offset losses from the drop in Tien Son's long position.| An Phat vs. FIT INVEST JSC | An Phat vs. Damsan JSC | An Phat vs. APG Securities Joint | An Phat vs. Binhthuan Agriculture Services |
| Tien Son vs. VTC Telecommunications JSC | Tien Son vs. Fecon Mining JSC | Tien Son vs. BaoMinh Insurance Corp | Tien Son vs. Petrolimex Insurance Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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