Correlation Between An Phat and Pacific Petroleum
Can any of the company-specific risk be diversified away by investing in both An Phat and Pacific Petroleum 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 Pacific Petroleum 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 Pacific Petroleum Transportation, you can compare the effects of market volatilities on An Phat and Pacific Petroleum 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 Pacific Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Pacific Petroleum.
Diversification Opportunities for An Phat and Pacific Petroleum
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AAA and Pacific is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Pacific Petroleum Transportati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Petroleum 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 Pacific Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Petroleum has no effect on the direction of An Phat i.e., An Phat and Pacific Petroleum go up and down completely randomly.
Pair Corralation between An Phat and Pacific Petroleum
Assuming the 90 days trading horizon An Phat Plastic is expected to under-perform the Pacific Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, An Phat Plastic is 1.05 times less risky than Pacific Petroleum. The stock trades about -0.04 of its potential returns per unit of risk. The Pacific Petroleum Transportation is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,199,544 in Pacific Petroleum Transportation on November 8, 2024 and sell it today you would earn a total of 520,456 from holding Pacific Petroleum Transportation or generate 43.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
An Phat Plastic vs. Pacific Petroleum Transportati
Performance |
| Timeline |
| An Phat Plastic |
| Pacific Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
An Phat and Pacific Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and Pacific Petroleum
The main advantage of trading using opposite An Phat and Pacific Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Pacific Petroleum 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 Pacific Petroleum will offset losses from the drop in Pacific Petroleum's long position.| An Phat vs. Ha Long Investment | An Phat vs. LDG Investment JSC | An Phat vs. Danang Rubber JSC | An Phat vs. Binh Minh Plastics |
| Pacific Petroleum vs. Elcom Technology Communications | Pacific Petroleum vs. Fecon Mining JSC | Pacific Petroleum vs. Saigon Beer Alcohol | Pacific Petroleum vs. Vincom Retail 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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