Correlation Between An Phat and Viet Thanh
Can any of the company-specific risk be diversified away by investing in both An Phat and Viet Thanh 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 Viet Thanh 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 Viet Thanh Plastic, you can compare the effects of market volatilities on An Phat and Viet Thanh 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 Viet Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Viet Thanh.
Diversification Opportunities for An Phat and Viet Thanh
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AAA and Viet is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Viet Thanh Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viet Thanh Plastic 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 Viet Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viet Thanh Plastic has no effect on the direction of An Phat i.e., An Phat and Viet Thanh go up and down completely randomly.
Pair Corralation between An Phat and Viet Thanh
Assuming the 90 days trading horizon An Phat is expected to generate 8.18 times less return on investment than Viet Thanh. But when comparing it to its historical volatility, An Phat Plastic is 1.22 times less risky than Viet Thanh. It trades about 0.01 of its potential returns per unit of risk. Viet Thanh Plastic is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 890,000 in Viet Thanh Plastic on November 1, 2024 and sell it today you would earn a total of 850,000 from holding Viet Thanh Plastic or generate 95.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.19% |
Values | Daily Returns |
An Phat Plastic vs. Viet Thanh Plastic
Performance |
Timeline |
An Phat Plastic |
Viet Thanh Plastic |
An Phat and Viet Thanh Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with An Phat and Viet Thanh
The main advantage of trading using opposite An Phat and Viet Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Viet Thanh 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 Viet Thanh will offset losses from the drop in Viet Thanh's long position.An Phat vs. Elcom Technology Communications | An Phat vs. Tay Ninh Rubber | An Phat vs. Danang Education Investment | An Phat vs. Southern Rubber Industry |
Viet Thanh vs. Petrovietnam Drilling Mud | Viet Thanh vs. Nam Kim Steel | Viet Thanh vs. Petrovietnam Technical Services | Viet Thanh vs. Innovative Technology Development |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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