Correlation Between An Phat and Techcom Vietnam

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

Diversification Opportunities for An Phat and Techcom Vietnam

0.57

Correlation Coefficient

An Phat  Techcom Vietnam

Very weak diversification

The 3 months correlation between AAA and Techcom is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Techcom Vietnam REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techcom Vietnam REIT 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 Techcom Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techcom Vietnam REIT has no effect on the direction of An Phat i.e., An Phat and Techcom Vietnam go up and down completely randomly.

Pair Corralation between An Phat and Techcom Vietnam

Assuming the 90 days trading horizon An Phat Plastic is expected to under-perform the Techcom Vietnam. But the stock apears to be less risky and, when comparing its historical volatility, An Phat Plastic is 2.5 times less risky than Techcom Vietnam. The stock trades about -0.14 of its potential returns per unit of risk. The Techcom Vietnam REIT is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  567,000  in Techcom Vietnam REIT on September 16, 2024 and sell it today you would lose (12,000) from holding Techcom Vietnam REIT or give up 2.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	74.24%
Values	Daily Returns

An Phat Plastic  vs.  Techcom Vietnam REIT

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.

Techcom Vietnam REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Techcom Vietnam REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Techcom Vietnam is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with An Phat and Techcom Vietnam

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

The idea behind An Phat Plastic and Techcom Vietnam REIT 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..