Correlation Between An Phat and Vnsteel Vicasa

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

Diversification Opportunities for An Phat and Vnsteel Vicasa

0.46

Correlation Coefficient

An Phat  Vnsteel Vicasa

Very weak diversification

The 3 months correlation between AAA and Vnsteel is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding An Phat Plastic and Vnsteel Vicasa JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vnsteel Vicasa 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 Vnsteel Vicasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vnsteel Vicasa JSC has no effect on the direction of An Phat i.e., An Phat and Vnsteel Vicasa go up and down completely randomly.

Pair Corralation between An Phat and Vnsteel Vicasa

Assuming the 90 days trading horizon An Phat Plastic is expected to generate 0.39 times more return on investment than Vnsteel Vicasa. However, An Phat Plastic is 2.55 times less risky than Vnsteel Vicasa. It trades about -0.04 of its potential returns per unit of risk. Vnsteel Vicasa JSC is currently generating about -0.03 per unit of risk. If you would invest  872,000  in An Phat Plastic on December 29, 2024 and sell it today you would lose (29,000) from holding An Phat Plastic or give up 3.33% 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.  Vnsteel Vicasa JSC

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.

Vnsteel Vicasa JSC

Risk-Adjusted Performance

Very Weak

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

Pair Trading with An Phat and Vnsteel Vicasa

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

The idea behind An Phat Plastic and Vnsteel Vicasa 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.