Correlation Between Alphanam and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Alphanam and Asia Pacific 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 Asia Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Asia Pacific Investment, you can compare the effects of market volatilities on Alphanam and Asia Pacific 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 Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Asia Pacific.
Diversification Opportunities for Alphanam and Asia Pacific
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphanam and Asia is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Asia Pacific Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Investment 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 Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Investment has no effect on the direction of Alphanam i.e., Alphanam and Asia Pacific go up and down completely randomly.
Pair Corralation between Alphanam and Asia Pacific
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Asia Pacific. In addition to that, Alphanam is 2.26 times more volatile than Asia Pacific Investment. It trades about -0.07 of its total potential returns per unit of risk. Asia Pacific Investment is currently generating about -0.12 per unit of volatility. If you would invest 770,000 in Asia Pacific Investment on September 1, 2024 and sell it today you would lose (40,000) from holding Asia Pacific Investment or give up 5.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 52.38% |
| Values | Daily Returns |
Alphanam ME vs. Asia Pacific Investment
Performance |
| Timeline |
| Alphanam ME |
| Asia Pacific Investment |
Alphanam and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Asia Pacific
The main advantage of trading using opposite Alphanam and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Asia Pacific 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 Asia Pacific will offset losses from the drop in Asia Pacific's long position.| Alphanam vs. Hanoi Plastics JSC | Alphanam vs. Everland Investment JSC | Alphanam vs. Thanh Dat Investment | Alphanam vs. Vietnam Rubber Group |
| Asia Pacific vs. FIT INVEST JSC | Asia Pacific vs. Damsan JSC | Asia Pacific vs. An Phat Plastic | Asia Pacific vs. Alphanam ME |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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