Correlation Between An Phat and Vietnam JSCmmercial

Can any of the company-specific risk be diversified away by investing in both An Phat and Vietnam JSCmmercial 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 An Phat and Vietnam JSCmmercial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between An Phat Plastic and Vietnam JSCmmercial Bank, you can compare the effects of market volatilities on An Phat and Vietnam JSCmmercial 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 An Phat with a short position of Vietnam JSCmmercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and Vietnam JSCmmercial.

Diversification Opportunities for An Phat and Vietnam JSCmmercial

0.51

Correlation Coefficient

An Phat  Vietnam JSCmmercial

Very weak diversification

The 3 months correlation between AAA and Vietnam is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Vietnam JSCmmercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam JSCmmercial Bank and An Phat 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 An Phat Plastic are associated (or correlated) with Vietnam JSCmmercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam JSCmmercial Bank has no effect on the direction of An Phat i.e., An Phat and Vietnam JSCmmercial go up and down completely randomly.

Pair Corralation between An Phat and Vietnam JSCmmercial

Assuming the 90 days trading horizon An Phat is expected to generate 1.59 times less return on investment than Vietnam JSCmmercial. But when comparing it to its historical volatility, An Phat Plastic is 1.09 times less risky than Vietnam JSCmmercial. It trades about 0.22 of its potential returns per unit of risk. Vietnam JSCmmercial Bank is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  3,360,000  in Vietnam JSCmmercial Bank on September 15, 2024 and sell it today you would earn a total of  275,000  from holding Vietnam JSCmmercial Bank or generate 8.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

An Phat Plastic  vs.  Vietnam JSCmmercial Bank

An Phat Plastic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days An Phat Plastic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Vietnam JSCmmercial Bank

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vietnam JSCmmercial Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Vietnam JSCmmercial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with An Phat and Vietnam JSCmmercial

The main advantage of trading using opposite An Phat and Vietnam JSCmmercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Phat position performs unexpectedly, Vietnam JSCmmercial 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 Vietnam JSCmmercial will offset losses from the drop in Vietnam JSCmmercial's long position.

The idea behind An Phat Plastic and Vietnam JSCmmercial Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.