Correlation Between An Phat and Phuoc Hoa
Can any of the company-specific risk be diversified away by investing in both An Phat and Phuoc Hoa 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 Phuoc Hoa 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 Phuoc Hoa Rubber, you can compare the effects of market volatilities on An Phat and Phuoc Hoa 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 Phuoc Hoa. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Phuoc Hoa.
Diversification Opportunities for An Phat and Phuoc Hoa
Modest diversification
The 3 months correlation between AAA and Phuoc is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Phuoc Hoa Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phuoc Hoa Rubber 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 Phuoc Hoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phuoc Hoa Rubber has no effect on the direction of An Phat i.e., An Phat and Phuoc Hoa go up and down completely randomly.
Pair Corralation between An Phat and Phuoc Hoa
Assuming the 90 days trading horizon An Phat Plastic is expected to under-perform the Phuoc Hoa. But the stock apears to be less risky and, when comparing its historical volatility, An Phat Plastic is 1.04 times less risky than Phuoc Hoa. The stock trades about -0.13 of its potential returns per unit of risk. The Phuoc Hoa Rubber is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,096,020 in Phuoc Hoa Rubber on November 3, 2024 and sell it today you would earn a total of 103,980 from holding Phuoc Hoa Rubber or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
An Phat Plastic vs. Phuoc Hoa Rubber
Performance |
| Timeline |
| An Phat Plastic |
| Phuoc Hoa Rubber |
An Phat and Phuoc Hoa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and Phuoc Hoa
The main advantage of trading using opposite An Phat and Phuoc Hoa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Phuoc Hoa 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 Phuoc Hoa will offset losses from the drop in Phuoc Hoa's long position.| An Phat vs. Hai An Transport | An Phat vs. Phuoc Hoa Rubber | An Phat vs. Saigon Beer Alcohol | An Phat vs. Vietnam Rubber Group |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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