Correlation Between An Phat and South Basic
Can any of the company-specific risk be diversified away by investing in both An Phat and South Basic 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 South Basic 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 South Basic Chemicals, you can compare the effects of market volatilities on An Phat and South Basic 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 South Basic. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and South Basic.
Diversification Opportunities for An Phat and South Basic
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AAA and South is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and South Basic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Basic Chemicals 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 South Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Basic Chemicals has no effect on the direction of An Phat i.e., An Phat and South Basic go up and down completely randomly.
Pair Corralation between An Phat and South Basic
Assuming the 90 days trading horizon An Phat Plastic is expected to generate 0.59 times more return on investment than South Basic. However, An Phat Plastic is 1.69 times less risky than South Basic. It trades about -0.3 of its potential returns per unit of risk. South Basic Chemicals is currently generating about -0.32 per unit of risk. If you would invest 885,000 in An Phat Plastic on October 25, 2024 and sell it today you would lose (53,000) from holding An Phat Plastic or give up 5.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
An Phat Plastic vs. South Basic Chemicals
Performance |
| Timeline |
| An Phat Plastic |
| South Basic Chemicals |
An Phat and South Basic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and South Basic
The main advantage of trading using opposite An Phat and South Basic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, South Basic 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 South Basic will offset losses from the drop in South Basic'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 |
| South Basic vs. FIT INVEST JSC | South Basic vs. Damsan JSC | South Basic vs. An Phat Plastic | South Basic vs. APG Securities Joint |
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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