Correlation Between DOMESCO Medical and An Phat
Can any of the company-specific risk be diversified away by investing in both DOMESCO Medical 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 DOMESCO Medical and An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DOMESCO Medical Import and An Phat Plastic, you can compare the effects of market volatilities on DOMESCO Medical 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 DOMESCO Medical with a short position of An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOMESCO Medical and An Phat.
Diversification Opportunities for DOMESCO Medical and An Phat
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DOMESCO and AAA is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding DOMESCO Medical Import 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 DOMESCO Medical 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 DOMESCO Medical Import 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 DOMESCO Medical i.e., DOMESCO Medical and An Phat go up and down completely randomly.
Pair Corralation between DOMESCO Medical and An Phat
Assuming the 90 days trading horizon DOMESCO Medical Import is expected to under-perform the An Phat. But the stock apears to be less risky and, when comparing its historical volatility, DOMESCO Medical Import is 1.01 times less risky than An Phat. The stock trades about -0.12 of its potential returns per unit of risk. The An Phat Plastic is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 827,000 in An Phat Plastic on September 3, 2024 and sell it today you would earn a total of 21,000 from holding An Phat Plastic or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.19% |
| Values | Daily Returns |
DOMESCO Medical Import vs. An Phat Plastic
Performance |
| Timeline |
| DOMESCO Medical Import |
| An Phat Plastic |
DOMESCO Medical and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DOMESCO Medical and An Phat
The main advantage of trading using opposite DOMESCO Medical and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOMESCO Medical 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.| DOMESCO Medical vs. FIT INVEST JSC | DOMESCO Medical vs. Damsan JSC | DOMESCO Medical vs. An Phat Plastic | DOMESCO Medical vs. Alphanam ME |
| An Phat vs. FIT INVEST JSC | An Phat vs. Damsan JSC | An Phat vs. Alphanam ME | An Phat vs. APG Securities Joint |
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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