Correlation Between An Phat and Ducgiang Chemicals
Can any of the company-specific risk be diversified away by investing in both An Phat and Ducgiang Chemicals 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 Ducgiang Chemicals 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 Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on An Phat and Ducgiang Chemicals 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 Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Ducgiang Chemicals.
Diversification Opportunities for An Phat and Ducgiang Chemicals
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AAA and Ducgiang is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang 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 Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of An Phat i.e., An Phat and Ducgiang Chemicals go up and down completely randomly.
Pair Corralation between An Phat and Ducgiang Chemicals
Assuming the 90 days trading horizon An Phat Plastic is expected to under-perform the Ducgiang Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, An Phat Plastic is 1.01 times less risky than Ducgiang Chemicals. The stock trades about -0.09 of its potential returns per unit of risk. The Ducgiang Chemicals Detergent is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 11,230,000 in Ducgiang Chemicals Detergent on September 1, 2024 and sell it today you would lose (280,000) from holding Ducgiang Chemicals Detergent or give up 2.49% 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. Ducgiang Chemicals Detergent
Performance |
| Timeline |
| An Phat Plastic |
| Ducgiang Chemicals |
An Phat and Ducgiang Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and Ducgiang Chemicals
The main advantage of trading using opposite An Phat and Ducgiang Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Ducgiang Chemicals 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 Ducgiang Chemicals will offset losses from the drop in Ducgiang Chemicals' long position.| An Phat vs. Ha Long Investment | An Phat vs. Dong Nai Plastic | An Phat vs. Tien Phong Plastic | An Phat vs. RangDong Plastic JSC |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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