Correlation Between An Phat and MB Securities

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

Diversification Opportunities for An Phat and MB Securities

0.82

Correlation Coefficient

An Phat  MB Securities

Very poor diversification

The 3 months correlation between AAA and MBS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and MB Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MB Securities JSC 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 MB Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MB Securities JSC has no effect on the direction of An Phat i.e., An Phat and MB Securities go up and down completely randomly.

Pair Corralation between An Phat and MB Securities

Assuming the 90 days trading horizon An Phat Plastic is expected to generate 0.43 times more return on investment than MB Securities. However, An Phat Plastic is 2.35 times less risky than MB Securities. It trades about 0.28 of its potential returns per unit of risk. MB Securities JSC is currently generating about 0.11 per unit of risk. If you would invest  850,000  in An Phat Plastic on September 28, 2024 and sell it today you would earn a total of  52,000  from holding An Phat Plastic or generate 6.12% return on investment over 90 days.

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

An Phat Plastic  vs.  MB Securities JSC

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.

MB Securities JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MB Securities JSC 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.

Pair Trading with An Phat and MB Securities

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

The idea behind An Phat Plastic and MB Securities JSC 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.