Correlation Between An Phat and FPT Corp

Can any of the company-specific risk be diversified away by investing in both An Phat and FPT Corp 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 FPT Corp 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 FPT Corp, you can compare the effects of market volatilities on An Phat and FPT Corp 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 FPT Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Phat and FPT Corp.

Diversification Opportunities for An Phat and FPT Corp

-0.28

Correlation Coefficient

An Phat  FPT Corp

Very good diversification

The 3 months correlation between AAA and FPT is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and FPT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Corp 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 FPT Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPT Corp has no effect on the direction of An Phat i.e., An Phat and FPT Corp go up and down completely randomly.

Pair Corralation between An Phat and FPT Corp

Assuming the 90 days trading horizon An Phat is expected to generate 3.71 times less return on investment than FPT Corp. But when comparing it to its historical volatility, An Phat Plastic is 1.49 times less risky than FPT Corp. It trades about 0.15 of its potential returns per unit of risk. FPT Corp is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  13,300,000  in FPT Corp on September 22, 2024 and sell it today you would earn a total of  1,673,000  from holding FPT Corp or generate 12.58% return on investment over 90 days.

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

An Phat Plastic  vs.  FPT Corp

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.

FPT Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FPT Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, FPT Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with An Phat and FPT Corp

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

The idea behind An Phat Plastic and FPT Corp 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.