Correlation Between Thong Nhat and An Phat
Can any of the company-specific risk be diversified away by investing in both Thong Nhat 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 Thong Nhat and An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thong Nhat Rubber and An Phat Plastic, you can compare the effects of market volatilities on Thong Nhat 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 Thong Nhat with a short position of An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thong Nhat and An Phat.
Diversification Opportunities for Thong Nhat and An Phat
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thong and AAA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Thong Nhat Rubber 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 Thong Nhat 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 Thong Nhat Rubber 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 Thong Nhat i.e., Thong Nhat and An Phat go up and down completely randomly.
Pair Corralation between Thong Nhat and An Phat
Assuming the 90 days trading horizon Thong Nhat Rubber is expected to generate 4.87 times more return on investment than An Phat. However, Thong Nhat is 4.87 times more volatile than An Phat Plastic. It trades about 0.02 of its potential returns per unit of risk. An Phat Plastic is currently generating about -0.03 per unit of risk. If you would invest 3,470,000 in Thong Nhat Rubber on October 30, 2024 and sell it today you would lose (20,000) from holding Thong Nhat Rubber or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.41% |
| Values | Daily Returns |
Thong Nhat Rubber vs. An Phat Plastic
Performance |
| Timeline |
| Thong Nhat Rubber |
| An Phat Plastic |
Thong Nhat and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thong Nhat and An Phat
The main advantage of trading using opposite Thong Nhat and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thong Nhat 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.| Thong Nhat vs. Vietnam Dairy Products | Thong Nhat vs. Southern Rubber Industry | Thong Nhat vs. Petrolimex Information Technology | Thong Nhat vs. Hanoi Plastics JSC |
| An Phat vs. Long An Food | An Phat vs. PostTelecommunication Equipment | An Phat vs. Vietnam Construction JSC | An Phat vs. Kien Giang Construction |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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