Correlation Between Transimex Transportation and An Phat

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

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

Diversification Opportunities for Transimex Transportation and An Phat

0.63

Correlation Coefficient

Transimex Transportation  An Phat

Poor diversification

The 3 months correlation between Transimex and AAA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Transimex Transportation JSC 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 Transimex Transportation 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 Transimex Transportation JSC 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 Transimex Transportation i.e., Transimex Transportation and An Phat go up and down completely randomly.

Pair Corralation between Transimex Transportation and An Phat

Assuming the 90 days trading horizon Transimex Transportation JSC is expected to under-perform the An Phat. But the stock apears to be less risky and, when comparing its historical volatility, Transimex Transportation JSC is 1.14 times less risky than An Phat. The stock trades about -0.04 of its potential returns per unit of risk. The An Phat Plastic is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  827,000  in An Phat Plastic on September 19, 2024 and sell it today you would earn a total of  27,000  from holding An Phat Plastic or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	72.73%
Values	Daily Returns

Transimex Transportation JSC  vs.  An Phat Plastic

Transimex Transportation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transimex Transportation JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Transimex Transportation is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Transimex Transportation and An Phat

The main advantage of trading using opposite Transimex Transportation and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transimex Transportation 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.

The idea behind Transimex Transportation JSC and An Phat Plastic 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.