Correlation Between Alphanam and An Phat
Can any of the company-specific risk be diversified away by investing in both Alphanam 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 Alphanam and An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and An Phat Plastic, you can compare the effects of market volatilities on Alphanam 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 Alphanam with a short position of An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and An Phat.
Diversification Opportunities for Alphanam and An Phat
Very poor diversification
The 3 months correlation between Alphanam and AAA is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME 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 Alphanam 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 Alphanam ME 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 Alphanam i.e., Alphanam and An Phat go up and down completely randomly.
Pair Corralation between Alphanam and An Phat
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the An Phat. In addition to that, Alphanam is 1.26 times more volatile than An Phat Plastic. It trades about -0.08 of its total potential returns per unit of risk. An Phat Plastic is currently generating about -0.1 per unit of volatility. If you would invest 893,000 in An Phat Plastic on August 28, 2024 and sell it today you would lose (36,000) from holding An Phat Plastic or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 45.45% |
| Values | Daily Returns |
Alphanam ME vs. An Phat Plastic
Performance |
| Timeline |
| Alphanam ME |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| An Phat Plastic |
Alphanam and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and An Phat
The main advantage of trading using opposite Alphanam and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam 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.| Alphanam vs. FIT INVEST JSC | Alphanam vs. Damsan JSC | Alphanam vs. An Phat Plastic | Alphanam vs. APG Securities Joint |
| An Phat vs. FIT INVEST JSC | An Phat vs. Damsan JSC | An Phat vs. APG Securities Joint | An Phat vs. Binhthuan Agriculture Services |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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