Correlation Between Sao Ta and An Phat
Can any of the company-specific risk be diversified away by investing in both Sao Ta 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 Sao Ta and An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sao Ta Foods and An Phat Plastic, you can compare the effects of market volatilities on Sao Ta 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 Sao Ta with a short position of An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Ta and An Phat.
Diversification Opportunities for Sao Ta and An Phat
Poor diversification
The 3 months correlation between Sao and AAA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sao Ta Foods 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 Sao Ta 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 Sao Ta Foods 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 Sao Ta i.e., Sao Ta and An Phat go up and down completely randomly.
Pair Corralation between Sao Ta and An Phat
Assuming the 90 days trading horizon Sao Ta Foods is expected to generate 0.47 times more return on investment than An Phat. However, Sao Ta Foods is 2.11 times less risky than An Phat. It trades about 0.04 of its potential returns per unit of risk. An Phat Plastic is currently generating about -0.18 per unit of risk. If you would invest 4,570,000 in Sao Ta Foods on August 27, 2024 and sell it today you would earn a total of 30,000 from holding Sao Ta Foods or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sao Ta Foods vs. An Phat Plastic
Performance |
| Timeline |
| Sao Ta Foods |
| An Phat Plastic |
Sao Ta and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sao Ta and An Phat
The main advantage of trading using opposite Sao Ta and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sao Ta 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.| Sao Ta vs. FIT INVEST JSC | Sao Ta vs. Damsan JSC | Sao Ta vs. An Phat Plastic | Sao Ta vs. APG Securities Joint |
| An Phat vs. Din Capital Investment | An Phat vs. Sao Ta Foods | An Phat vs. Hai An Transport | An Phat vs. 577 Investment Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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