Correlation Between An Phat and MHC JSC
Can any of the company-specific risk be diversified away by investing in both An Phat and MHC JSC 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 MHC JSC 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 MHC JSC, you can compare the effects of market volatilities on An Phat and MHC JSC 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 MHC JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and MHC JSC.
Diversification Opportunities for An Phat and MHC JSC
Very poor diversification
The 3 months correlation between AAA and MHC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and MHC JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHC JSC 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 MHC JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHC JSC has no effect on the direction of An Phat i.e., An Phat and MHC JSC go up and down completely randomly.
Pair Corralation between An Phat and MHC JSC
Assuming the 90 days trading horizon An Phat Plastic is expected to under-perform the MHC JSC. But the stock apears to be less risky and, when comparing its historical volatility, An Phat Plastic is 1.49 times less risky than MHC JSC. The stock trades about -0.16 of its potential returns per unit of risk. The MHC JSC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 683,000 in MHC JSC on August 30, 2024 and sell it today you would lose (32,000) from holding MHC JSC or give up 4.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
An Phat Plastic vs. MHC JSC
Performance |
| Timeline |
| An Phat Plastic |
| MHC JSC |
An Phat and MHC JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and MHC JSC
The main advantage of trading using opposite An Phat and MHC JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, MHC JSC 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 MHC JSC will offset losses from the drop in MHC JSC's long position.| An Phat vs. FIT INVEST JSC | An Phat vs. Damsan JSC | An Phat vs. Alphanam ME | An Phat vs. APG Securities Joint |
| MHC JSC vs. FIT INVEST JSC | MHC JSC vs. Damsan JSC | MHC JSC vs. An Phat Plastic | MHC JSC 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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