Correlation Between An Phat and Binhthuan Agriculture
Can any of the company-specific risk be diversified away by investing in both An Phat and Binhthuan Agriculture 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 Binhthuan Agriculture 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 Binhthuan Agriculture Services, you can compare the effects of market volatilities on An Phat and Binhthuan Agriculture 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 Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Binhthuan Agriculture.
Diversification Opportunities for An Phat and Binhthuan Agriculture
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AAA and Binhthuan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture 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 Binhthuan Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binhthuan Agriculture has no effect on the direction of An Phat i.e., An Phat and Binhthuan Agriculture go up and down completely randomly.
Pair Corralation between An Phat and Binhthuan Agriculture
Assuming the 90 days trading horizon An Phat Plastic is expected to under-perform the Binhthuan Agriculture. In addition to that, An Phat is 1.62 times more volatile than Binhthuan Agriculture Services. It trades about -0.1 of its total potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about 0.27 per unit of volatility. If you would invest 368,000 in Binhthuan Agriculture Services on August 27, 2024 and sell it today you would earn a total of 24,000 from holding Binhthuan Agriculture Services or generate 6.52% 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. Binhthuan Agriculture Services
Performance |
| Timeline |
| An Phat Plastic |
| Binhthuan Agriculture |
An Phat and Binhthuan Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and Binhthuan Agriculture
The main advantage of trading using opposite An Phat and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Binhthuan Agriculture 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 Binhthuan Agriculture will offset losses from the drop in Binhthuan Agriculture's long position.| An Phat vs. Vu Dang Investment | An Phat vs. Thanh Dat Investment | An Phat vs. HVC Investment and | An Phat vs. Dinhvu Port 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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