Correlation Between Pha Lai and Long An
Can any of the company-specific risk be diversified away by investing in both Pha Lai and Long An 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 Pha Lai and Long An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pha Lai Thermal and Long An Food, you can compare the effects of market volatilities on Pha Lai and Long An 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 Pha Lai with a short position of Long An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Lai and Long An.
Diversification Opportunities for Pha Lai and Long An
Excellent diversification
The 3 months correlation between Pha and Long is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pha Lai Thermal and Long An Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long An Food and Pha Lai 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 Pha Lai Thermal are associated (or correlated) with Long An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long An Food has no effect on the direction of Pha Lai i.e., Pha Lai and Long An go up and down completely randomly.
Pair Corralation between Pha Lai and Long An
Assuming the 90 days trading horizon Pha Lai Thermal is expected to under-perform the Long An. But the stock apears to be less risky and, when comparing its historical volatility, Pha Lai Thermal is 3.07 times less risky than Long An. The stock trades about -0.39 of its potential returns per unit of risk. The Long An Food is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,760,000 in Long An Food on October 11, 2024 and sell it today you would earn a total of 60,000 from holding Long An Food or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Pha Lai Thermal vs. Long An Food
Performance |
| Timeline |
| Pha Lai Thermal |
| Long An Food |
Pha Lai and Long An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Lai and Long An
The main advantage of trading using opposite Pha Lai and Long An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Lai position performs unexpectedly, Long An 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 Long An will offset losses from the drop in Long An's long position.| Pha Lai vs. FIT INVEST JSC | Pha Lai vs. Damsan JSC | Pha Lai vs. An Phat Plastic | Pha Lai vs. APG Securities Joint |
| Long An vs. SMC Investment Trading | Long An vs. Pha Lai Thermal | Long An vs. Thanh Dat Investment | Long An vs. Viet Thanh Plastic |
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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