Correlation Between An Phat and Vincom Retail
Can any of the company-specific risk be diversified away by investing in both An Phat and Vincom Retail 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 Vincom Retail 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 Vincom Retail JSC, you can compare the effects of market volatilities on An Phat and Vincom Retail 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 Vincom Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Vincom Retail.
Diversification Opportunities for An Phat and Vincom Retail
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AAA and Vincom is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail 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 Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of An Phat i.e., An Phat and Vincom Retail go up and down completely randomly.
Pair Corralation between An Phat and Vincom Retail
Assuming the 90 days trading horizon An Phat Plastic is expected to generate 1.04 times more return on investment than Vincom Retail. However, An Phat is 1.04 times more volatile than Vincom Retail JSC. It trades about 0.02 of its potential returns per unit of risk. Vincom Retail JSC is currently generating about -0.04 per unit of risk. If you would invest 799,000 in An Phat Plastic on August 25, 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
An Phat Plastic vs. Vincom Retail JSC
Performance |
| Timeline |
| An Phat Plastic |
| Vincom Retail JSC |
An Phat and Vincom Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and Vincom Retail
The main advantage of trading using opposite An Phat and Vincom Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Vincom Retail 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 Vincom Retail will offset losses from the drop in Vincom Retail'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 |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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