Correlation Between Song Hong and An Phat
Can any of the company-specific risk be diversified away by investing in both Song Hong 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 Song Hong and An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Hong Aluminum and An Phat Plastic, you can compare the effects of market volatilities on Song Hong 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 Song Hong with a short position of An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Hong and An Phat.
Diversification Opportunities for Song Hong and An Phat
Very poor diversification
The 3 months correlation between Song and AAA is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Song Hong Aluminum 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 Song Hong 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 Song Hong Aluminum 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 Song Hong i.e., Song Hong and An Phat go up and down completely randomly.
Pair Corralation between Song Hong and An Phat
Assuming the 90 days trading horizon Song Hong Aluminum is expected to generate 1.42 times more return on investment than An Phat. However, Song Hong is 1.42 times more volatile than An Phat Plastic. It trades about 0.03 of its potential returns per unit of risk. An Phat Plastic is currently generating about 0.04 per unit of risk. If you would invest 380,000 in Song Hong Aluminum on September 14, 2024 and sell it today you would earn a total of 80,000 from holding Song Hong Aluminum or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Song Hong Aluminum vs. An Phat Plastic
Performance |
| Timeline |
| Song Hong Aluminum |
| An Phat Plastic |
Song Hong and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Hong and An Phat
The main advantage of trading using opposite Song Hong and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Hong 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.| Song Hong vs. FIT INVEST JSC | Song Hong vs. Damsan JSC | Song Hong vs. An Phat Plastic | Song Hong vs. Alphanam ME |
| An Phat vs. LDG Investment JSC | An Phat vs. Vina2 Investment and | An Phat vs. Ducgiang Chemicals Detergent | An Phat vs. Song Hong Aluminum |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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