Correlation Between An Phat and Sao Mai

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

Diversification Opportunities for An Phat and Sao Mai

0.48

Correlation Coefficient

An Phat  Sao Mai

Very weak diversification

The 3 months correlation between AAA and Sao is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Sao Mai Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Mai Group 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 Sao Mai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Mai Group has no effect on the direction of An Phat i.e., An Phat and Sao Mai go up and down completely randomly.

Pair Corralation between An Phat and Sao Mai

Assuming the 90 days trading horizon An Phat Plastic is expected to generate 1.14 times more return on investment than Sao Mai. However, An Phat is 1.14 times more volatile than Sao Mai Group. It trades about -0.05 of its potential returns per unit of risk. Sao Mai Group is currently generating about -0.13 per unit of risk. If you would invest  872,000  in An Phat Plastic on December 28, 2024 and sell it today you would lose (30,000) from holding An Phat Plastic or give up 3.44% of portfolio value over 90 days.

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

An Phat Plastic  vs.  Sao Mai Group

An Phat Plastic

Risk-Adjusted Performance

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 very healthy basic indicators, An Phat is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Sao Mai Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sao Mai Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary 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 Sao Mai

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

The idea behind An Phat Plastic and Sao Mai Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.