Correlation Between Everland Investment and An Phat

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

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

Diversification Opportunities for Everland Investment and An Phat

0.68

Correlation Coefficient

Everland Investment  An Phat

Poor diversification

The 3 months correlation between Everland and AAA is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Everland Investment 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 Everland Investment 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 Everland Investment 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 Everland Investment i.e., Everland Investment and An Phat go up and down completely randomly.

Pair Corralation between Everland Investment and An Phat

Assuming the 90 days trading horizon Everland Investment JSC is expected to generate 1.43 times more return on investment than An Phat. However, Everland Investment is 1.43 times more volatile than An Phat Plastic. It trades about 0.01 of its potential returns per unit of risk. An Phat Plastic is currently generating about -0.05 per unit of risk. If you would invest  630,000  in Everland Investment JSC on December 21, 2024 and sell it today you would earn a total of  4,000  from holding Everland Investment JSC or generate 0.63% return on investment over 90 days.

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

Everland Investment JSC  vs.  An Phat Plastic

Everland Investment JSC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Everland Investment JSC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Everland Investment 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

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.

Pair Trading with Everland Investment and An Phat

The main advantage of trading using opposite Everland Investment and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everland Investment 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 Everland Investment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .