Correlation Between An Phat and Saigon Machinery
Can any of the company-specific risk be diversified away by investing in both An Phat and Saigon Machinery 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 Saigon Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between An Phat Holdings and Saigon Machinery Spare, you can compare the effects of market volatilities on An Phat and Saigon Machinery 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 Saigon Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Saigon Machinery.
Diversification Opportunities for An Phat and Saigon Machinery
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between APH and Saigon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Holdings and Saigon Machinery Spare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Machinery Spare 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 Holdings are associated (or correlated) with Saigon Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Machinery Spare has no effect on the direction of An Phat i.e., An Phat and Saigon Machinery go up and down completely randomly.
Pair Corralation between An Phat and Saigon Machinery
Assuming the 90 days trading horizon An Phat is expected to generate 19.45 times less return on investment than Saigon Machinery. But when comparing it to its historical volatility, An Phat Holdings is 1.77 times less risky than Saigon Machinery. It trades about 0.09 of its potential returns per unit of risk. Saigon Machinery Spare is currently generating about 1.03 of returns per unit of risk over similar time horizon. If you would invest 1,090,000 in Saigon Machinery Spare on October 17, 2024 and sell it today you would earn a total of 510,000 from holding Saigon Machinery Spare or generate 46.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
An Phat Holdings vs. Saigon Machinery Spare
Performance |
| Timeline |
| An Phat Holdings |
| Saigon Machinery Spare |
An Phat and Saigon Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Phat and Saigon Machinery
The main advantage of trading using opposite An Phat and Saigon Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Saigon Machinery 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 Saigon Machinery will offset losses from the drop in Saigon Machinery's long position.| An Phat vs. Song Hong Construction | An Phat vs. Techno Agricultural Supplying | An Phat vs. Saigon Machinery Spare | An Phat vs. PVI Reinsurance Corp |
| Saigon Machinery vs. Vu Dang Investment | Saigon Machinery vs. PV2 Investment JSC | Saigon Machinery vs. Danang Education Investment | Saigon Machinery vs. CEO Group JSC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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