Correlation Between Alphanam and Tien Son
Can any of the company-specific risk be diversified away by investing in both Alphanam and Tien Son 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 Tien Son into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Tien Son Thanh, you can compare the effects of market volatilities on Alphanam and Tien Son 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 Tien Son. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Tien Son.
Diversification Opportunities for Alphanam and Tien Son
Very poor diversification
The 3 months correlation between Alphanam and Tien is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Tien Son Thanh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Son Thanh 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 Tien Son. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Son Thanh has no effect on the direction of Alphanam i.e., Alphanam and Tien Son go up and down completely randomly.
Pair Corralation between Alphanam and Tien Son
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Tien Son. In addition to that, Alphanam is 1.31 times more volatile than Tien Son Thanh. It trades about -0.08 of its total potential returns per unit of risk. Tien Son Thanh is currently generating about -0.04 per unit of volatility. If you would invest 590,000 in Tien Son Thanh on August 30, 2024 and sell it today you would lose (254,000) from holding Tien Son Thanh or give up 43.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 68.5% |
| Values | Daily Returns |
Alphanam ME vs. Tien Son Thanh
Performance |
| Timeline |
| Alphanam ME |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tien Son Thanh |
Alphanam and Tien Son Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Tien Son
The main advantage of trading using opposite Alphanam and Tien Son positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Tien Son 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 Tien Son will offset losses from the drop in Tien Son's long position.| Alphanam vs. Vu Dang Investment | Alphanam vs. BIDV Insurance Corp | Alphanam vs. Vien Dong Investment | Alphanam vs. TDG Global Investment |
| Tien Son vs. VTC Telecommunications JSC | Tien Son vs. Fecon Mining JSC | Tien Son vs. BaoMinh Insurance Corp | Tien Son vs. Petrolimex Insurance Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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