Correlation Between Alphanam and CEO Group
Can any of the company-specific risk be diversified away by investing in both Alphanam and CEO Group 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 CEO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and CEO Group JSC, you can compare the effects of market volatilities on Alphanam and CEO Group 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 CEO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and CEO Group.
Diversification Opportunities for Alphanam and CEO Group
Poor diversification
The 3 months correlation between Alphanam and CEO is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and CEO Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Group JSC 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 CEO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Group JSC has no effect on the direction of Alphanam i.e., Alphanam and CEO Group go up and down completely randomly.
Pair Corralation between Alphanam and CEO Group
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the CEO Group. But the stock apears to be less risky and, when comparing its historical volatility, Alphanam ME is 1.06 times less risky than CEO Group. The stock trades about -0.07 of its potential returns per unit of risk. The CEO Group JSC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,374,294 in CEO Group JSC on August 31, 2024 and sell it today you would earn a total of 45,706 from holding CEO Group JSC or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 67.37% |
| Values | Daily Returns |
Alphanam ME vs. CEO Group JSC
Performance |
| Timeline |
| Alphanam ME |
| CEO Group JSC |
Alphanam and CEO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and CEO Group
The main advantage of trading using opposite Alphanam and CEO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, CEO Group 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 CEO Group will offset losses from the drop in CEO Group's long position.| Alphanam vs. FIT INVEST JSC | Alphanam vs. Damsan JSC | Alphanam vs. An Phat Plastic | Alphanam vs. APG Securities Joint |
| CEO Group vs. FIT INVEST JSC | CEO Group vs. Damsan JSC | CEO Group vs. An Phat Plastic | CEO Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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