Correlation Between Alphanam and Ba Ria
Can any of the company-specific risk be diversified away by investing in both Alphanam and Ba Ria 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 Ba Ria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Ba Ria Thermal, you can compare the effects of market volatilities on Alphanam and Ba Ria 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 Ba Ria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Ba Ria.
Diversification Opportunities for Alphanam and Ba Ria
Poor diversification
The 3 months correlation between Alphanam and BTP is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Ba Ria Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ba Ria Thermal 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 Ba Ria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ba Ria Thermal has no effect on the direction of Alphanam i.e., Alphanam and Ba Ria go up and down completely randomly.
Pair Corralation between Alphanam and Ba Ria
Assuming the 90 days trading horizon Alphanam ME is expected to generate 5.02 times more return on investment than Ba Ria. However, Alphanam is 5.02 times more volatile than Ba Ria Thermal. It trades about -0.07 of its potential returns per unit of risk. Ba Ria Thermal is currently generating about -0.47 per unit of risk. If you would invest 500,000 in Alphanam ME on September 1, 2024 and sell it today you would lose (20,000) from holding Alphanam ME or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Alphanam ME vs. Ba Ria Thermal
Performance |
| Timeline |
| Alphanam ME |
| Ba Ria Thermal |
Alphanam and Ba Ria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Ba Ria
The main advantage of trading using opposite Alphanam and Ba Ria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Ba Ria 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 Ba Ria will offset losses from the drop in Ba Ria's long position.| Alphanam vs. Hanoi Plastics JSC | Alphanam vs. Everland Investment JSC | Alphanam vs. Thanh Dat Investment | Alphanam vs. Vietnam Rubber Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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