Correlation Between An Phat and Innovative Technology

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

Diversification Opportunities for An Phat and Innovative Technology

0.57

Correlation Coefficient

An Phat  Innovative Technology

Very weak diversification

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

Pair Corralation between An Phat and Innovative Technology

Assuming the 90 days trading horizon An Phat Plastic is expected to generate 1.13 times more return on investment than Innovative Technology. However, An Phat is 1.13 times more volatile than Innovative Technology Development. It trades about 0.2 of its potential returns per unit of risk. Innovative Technology Development is currently generating about 0.13 per unit of risk. If you would invest  669,117  in An Phat Plastic on May 5, 2025 and sell it today you would earn a total of  181,883  from holding An Phat Plastic or generate 27.18% return on investment over 90 days.

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

An Phat Plastic  vs.  Innovative Technology Developm

An Phat Plastic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in An Phat Plastic are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, An Phat displayed solid returns over the last few months and may actually be approaching a breakup point.

Innovative Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Technology Development are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Innovative Technology displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with An Phat and Innovative Technology

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

The idea behind An Phat Plastic and Innovative Technology Development 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.