Correlation Between An Phat and Nam Long
Can any of the company-specific risk be diversified away by investing in both An Phat and Nam Long 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 Nam Long 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 Nam Long Investment, you can compare the effects of market volatilities on An Phat and Nam Long 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 Nam Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Nam Long.
Diversification Opportunities for An Phat and Nam Long
Very poor diversification
The 3 months correlation between AAA and Nam is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Nam Long Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Long Investment 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 Nam Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Long Investment has no effect on the direction of An Phat i.e., An Phat and Nam Long go up and down completely randomly.
Pair Corralation between An Phat and Nam Long
Assuming the 90 days trading horizon An Phat Plastic is expected to under-perform the Nam Long. But the stock apears to be less risky and, when comparing its historical volatility, An Phat Plastic is 1.08 times less risky than Nam Long. The stock trades about -0.03 of its potential returns per unit of risk. The Nam Long Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,203,422 in Nam Long Investment on August 31, 2024 and sell it today you would earn a total of 626,578 from holding Nam Long Investment or generate 19.56% 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. Nam Long Investment
Performance |
| Timeline |
| An Phat Plastic |
| Nam Long Investment |
An Phat and Nam Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and Nam Long
The main advantage of trading using opposite An Phat and Nam Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Nam Long 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 Nam Long will offset losses from the drop in Nam Long's long position.| An Phat vs. Dong A Hotel | An Phat vs. Military Insurance Corp | An Phat vs. Vinhomes JSC | An Phat vs. Techcom Vietnam REIT |
| Nam Long vs. Fecon Mining JSC | Nam Long vs. DOMESCO Medical Import | Nam Long vs. Saigon Telecommunication Technologies | Nam Long vs. Vinhomes JSC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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