Correlation Between An Phat and VTC Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both An Phat and VTC Telecommunicatio 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 VTC Telecommunicatio 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 VTC Telecommunications JSC, you can compare the effects of market volatilities on An Phat and VTC Telecommunicatio 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 VTC Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and VTC Telecommunicatio.
Diversification Opportunities for An Phat and VTC Telecommunicatio
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between AAA and VTC is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and VTC Telecommunications JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC Telecommunications 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 VTC Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTC Telecommunications has no effect on the direction of An Phat i.e., An Phat and VTC Telecommunicatio go up and down completely randomly.
Pair Corralation between An Phat and VTC Telecommunicatio
Assuming the 90 days trading horizon An Phat Plastic is expected to generate 0.61 times more return on investment than VTC Telecommunicatio. However, An Phat Plastic is 1.64 times less risky than VTC Telecommunicatio. It trades about -0.15 of its potential returns per unit of risk. VTC Telecommunications JSC is currently generating about -0.11 per unit of risk. If you would invest 861,000 in An Phat Plastic on October 17, 2024 and sell it today you would lose (31,000) from holding An Phat Plastic or give up 3.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
An Phat Plastic vs. VTC Telecommunications JSC
Performance |
| Timeline |
| An Phat Plastic |
| VTC Telecommunications |
An Phat and VTC Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and VTC Telecommunicatio
The main advantage of trading using opposite An Phat and VTC Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, VTC Telecommunicatio 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 VTC Telecommunicatio will offset losses from the drop in VTC Telecommunicatio's long position.| An Phat vs. Long Giang Investment | An Phat vs. Tng Investment And | An Phat vs. Bao Ngoc Investment | An Phat vs. Construction And Investment |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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