Correlation Between Tien Phong and An Phat
Can any of the company-specific risk be diversified away by investing in both Tien Phong 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 Tien Phong and An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Phong Plastic and An Phat Holdings, you can compare the effects of market volatilities on Tien Phong 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 Tien Phong with a short position of An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Phong and An Phat.
Diversification Opportunities for Tien Phong and An Phat
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tien and APH is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Tien Phong Plastic and An Phat Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Phat Holdings and Tien Phong 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 Tien Phong Plastic 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 Holdings has no effect on the direction of Tien Phong i.e., Tien Phong and An Phat go up and down completely randomly.
Pair Corralation between Tien Phong and An Phat
Assuming the 90 days trading horizon Tien Phong Plastic is expected to under-perform the An Phat. In addition to that, Tien Phong is 1.16 times more volatile than An Phat Holdings. It trades about -0.17 of its total potential returns per unit of risk. An Phat Holdings is currently generating about 0.09 per unit of volatility. If you would invest 671,000 in An Phat Holdings on October 17, 2024 and sell it today you would earn a total of 22,000 from holding An Phat Holdings or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tien Phong Plastic vs. An Phat Holdings
Performance |
| Timeline |
| Tien Phong Plastic |
| An Phat Holdings |
Tien Phong and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Phong and An Phat
The main advantage of trading using opposite Tien Phong and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Phong 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.| Tien Phong vs. Hoang Huy Investment | Tien Phong vs. Thanh Dat Investment | Tien Phong vs. HUD1 Investment and | Tien Phong vs. Danang Education Investment |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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