Correlation Between Bao Ngoc and An Phat
Can any of the company-specific risk be diversified away by investing in both Bao Ngoc and An Phat 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 Bao Ngoc and An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bao Ngoc Investment and An Phat Plastic, you can compare the effects of market volatilities on Bao Ngoc and An Phat 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 Bao Ngoc with a short position of An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bao Ngoc and An Phat.
Diversification Opportunities for Bao Ngoc and An Phat
Good diversification
The 3 months correlation between Bao and AAA is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bao Ngoc Investment and An Phat Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Phat Plastic and Bao Ngoc 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 Bao Ngoc Investment are associated (or correlated) with An Phat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Phat Plastic has no effect on the direction of Bao Ngoc i.e., Bao Ngoc and An Phat go up and down completely randomly.
Pair Corralation between Bao Ngoc and An Phat
Assuming the 90 days trading horizon Bao Ngoc Investment is expected to generate 2.75 times more return on investment than An Phat. However, Bao Ngoc is 2.75 times more volatile than An Phat Plastic. It trades about -0.05 of its potential returns per unit of risk. An Phat Plastic is currently generating about -0.15 per unit of risk. If you would invest 950,000 in Bao Ngoc Investment on October 17, 2024 and sell it today you would lose (40,000) from holding Bao Ngoc Investment or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bao Ngoc Investment vs. An Phat Plastic
Performance |
| Timeline |
| Bao Ngoc Investment |
| An Phat Plastic |
Bao Ngoc and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bao Ngoc and An Phat
The main advantage of trading using opposite Bao Ngoc and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bao Ngoc position performs unexpectedly, An Phat 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 An Phat will offset losses from the drop in An Phat's long position.| Bao Ngoc vs. TDT Investment and | Bao Ngoc vs. Construction And Investment | Bao Ngoc vs. Hochiminh City Metal | Bao Ngoc vs. SMC Investment Trading |
| An Phat vs. Long Giang Investment | An Phat vs. Tng Investment And | An Phat vs. Bao Ngoc Investment | An Phat vs. Construction And 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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