Correlation Between Van Phu and Plastic Additives
Can any of the company-specific risk be diversified away by investing in both Van Phu and Plastic Additives 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 Van Phu and Plastic Additives into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Van Phu and Plastic Additives JSC, you can compare the effects of market volatilities on Van Phu and Plastic Additives 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 Van Phu with a short position of Plastic Additives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Van Phu and Plastic Additives.
Diversification Opportunities for Van Phu and Plastic Additives
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Van and Plastic is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Van Phu and Plastic Additives JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Additives JSC and Van Phu 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 Van Phu are associated (or correlated) with Plastic Additives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Additives JSC has no effect on the direction of Van Phu i.e., Van Phu and Plastic Additives go up and down completely randomly.
Pair Corralation between Van Phu and Plastic Additives
Assuming the 90 days trading horizon Van Phu is expected to under-perform the Plastic Additives. But the stock apears to be less risky and, when comparing its historical volatility, Van Phu is 5.47 times less risky than Plastic Additives. The stock trades about -0.01 of its potential returns per unit of risk. The Plastic Additives JSC is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 840,000 in Plastic Additives JSC on August 31, 2024 and sell it today you would earn a total of 240,000 from holding Plastic Additives JSC or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Van Phu vs. Plastic Additives JSC
Performance |
| Timeline |
| Van Phu |
| Plastic Additives JSC |
Van Phu and Plastic Additives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Van Phu and Plastic Additives
The main advantage of trading using opposite Van Phu and Plastic Additives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Van Phu position performs unexpectedly, Plastic Additives 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 Plastic Additives will offset losses from the drop in Plastic Additives' long position.| Van Phu vs. Hochiminh City Metal | Van Phu vs. Pacific Petroleum Transportation | Van Phu vs. Bao Ngoc Investment | Van Phu vs. Hai An Transport |
| Plastic Additives vs. Song Hong Garment | Plastic Additives vs. Alphanam ME | Plastic Additives vs. Hochiminh City Metal | Plastic Additives vs. Atesco Industrial Cartering |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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