Correlation Between An Phat and RangDong Plastic
Can any of the company-specific risk be diversified away by investing in both An Phat and RangDong Plastic 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 RangDong Plastic 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 RangDong Plastic JSC, you can compare the effects of market volatilities on An Phat and RangDong Plastic 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 RangDong Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and RangDong Plastic.
Diversification Opportunities for An Phat and RangDong Plastic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AAA and RangDong is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and RangDong Plastic JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RangDong Plastic 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 RangDong Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RangDong Plastic JSC has no effect on the direction of An Phat i.e., An Phat and RangDong Plastic go up and down completely randomly.
Pair Corralation between An Phat and RangDong Plastic
Assuming the 90 days trading horizon An Phat Plastic is expected to generate 0.66 times more return on investment than RangDong Plastic. However, An Phat Plastic is 1.52 times less risky than RangDong Plastic. It trades about 0.02 of its potential returns per unit of risk. RangDong Plastic JSC is currently generating about -0.08 per unit of risk. If you would invest 799,000 in An Phat Plastic on August 26, 2024 and sell it today you would earn a total of 37,000 from holding An Phat Plastic or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
An Phat Plastic vs. RangDong Plastic JSC
Performance |
| Timeline |
| An Phat Plastic |
| RangDong Plastic JSC |
An Phat and RangDong Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and RangDong Plastic
The main advantage of trading using opposite An Phat and RangDong Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, RangDong Plastic 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 RangDong Plastic will offset losses from the drop in RangDong Plastic's long position.| An Phat vs. South Basic Chemicals | An Phat vs. Saigon Beer Alcohol | An Phat vs. Vietnam Petroleum Transport | An Phat vs. Fecon Mining JSC |
| RangDong Plastic vs. FIT INVEST JSC | RangDong Plastic vs. Damsan JSC | RangDong Plastic vs. An Phat Plastic | RangDong Plastic 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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