Correlation Between An Phat and Joint Stock

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

Diversification Opportunities for An Phat and Joint Stock

0.22

Correlation Coefficient

An Phat  Joint Stock

Modest diversification

The 3 months correlation between AAA and Joint is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Joint Stock Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Stock Commercial 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 Joint Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Stock Commercial has no effect on the direction of An Phat i.e., An Phat and Joint Stock go up and down completely randomly.

Pair Corralation between An Phat and Joint Stock

Assuming the 90 days trading horizon An Phat Plastic is expected to under-perform the Joint Stock. But the stock apears to be less risky and, when comparing its historical volatility, An Phat Plastic is 1.09 times less risky than Joint Stock. The stock trades about -0.13 of its potential returns per unit of risk. The Joint Stock Commercial is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  4,690,000  in Joint Stock Commercial on October 8, 2024 and sell it today you would lose (870,000) from holding Joint Stock Commercial or give up 18.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

An Phat Plastic  vs.  Joint Stock Commercial

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.

Joint Stock Commercial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Joint Stock Commercial 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 fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with An Phat and Joint Stock

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

The idea behind An Phat Plastic and Joint Stock Commercial 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.