Correlation Between An Phat and Vietnam Dairy
Can any of the company-specific risk be diversified away by investing in both An Phat and Vietnam Dairy 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 Vietnam Dairy 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 Vietnam Dairy Products, you can compare the effects of market volatilities on An Phat and Vietnam Dairy 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 Vietnam Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Vietnam Dairy.
Diversification Opportunities for An Phat and Vietnam Dairy
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AAA and Vietnam is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Vietnam Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Dairy Products 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 Vietnam Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Dairy Products has no effect on the direction of An Phat i.e., An Phat and Vietnam Dairy go up and down completely randomly.
Pair Corralation between An Phat and Vietnam Dairy
Assuming the 90 days trading horizon An Phat Plastic is expected to generate 2.84 times more return on investment than Vietnam Dairy. However, An Phat is 2.84 times more volatile than Vietnam Dairy Products. It trades about -0.1 of its potential returns per unit of risk. Vietnam Dairy Products is currently generating about -0.37 per unit of risk. If you would invest 893,000 in An Phat Plastic on August 28, 2024 and sell it today you would lose (36,000) from holding An Phat Plastic or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
An Phat Plastic vs. Vietnam Dairy Products
Performance |
| Timeline |
| An Phat Plastic |
| Vietnam Dairy Products |
An Phat and Vietnam Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and Vietnam Dairy
The main advantage of trading using opposite An Phat and Vietnam Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Vietnam Dairy 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 Vietnam Dairy will offset losses from the drop in Vietnam Dairy's long position.| An Phat vs. Vu Dang Investment | An Phat vs. Thanh Dat Investment | An Phat vs. HVC Investment and | An Phat vs. Dinhvu Port Investment |
| Vietnam Dairy vs. Taseco Air Services | Vietnam Dairy vs. Fecon Mining JSC | Vietnam Dairy vs. Southern Rubber Industry | Vietnam Dairy vs. Danang Education Investment |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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