Correlation Between Alphanam and Danang Rubber
Can any of the company-specific risk be diversified away by investing in both Alphanam and Danang Rubber 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 Danang Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Danang Rubber JSC, you can compare the effects of market volatilities on Alphanam and Danang Rubber 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 Danang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Danang Rubber.
Diversification Opportunities for Alphanam and Danang Rubber
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alphanam and Danang is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Danang Rubber JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Rubber 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 Danang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Rubber JSC has no effect on the direction of Alphanam i.e., Alphanam and Danang Rubber go up and down completely randomly.
Pair Corralation between Alphanam and Danang Rubber
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Danang Rubber. In addition to that, Alphanam is 3.72 times more volatile than Danang Rubber JSC. It trades about -0.07 of its total potential returns per unit of risk. Danang Rubber JSC is currently generating about 0.04 per unit of volatility. If you would invest 2,830,000 in Danang Rubber JSC on September 1, 2024 and sell it today you would earn a total of 25,000 from holding Danang Rubber JSC or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 50.0% |
| Values | Daily Returns |
Alphanam ME vs. Danang Rubber JSC
Performance |
| Timeline |
| Alphanam ME |
| Danang Rubber JSC |
Alphanam and Danang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Danang Rubber
The main advantage of trading using opposite Alphanam and Danang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Danang Rubber 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 Danang Rubber will offset losses from the drop in Danang Rubber's long position.| Alphanam vs. Hanoi Plastics JSC | Alphanam vs. Everland Investment JSC | Alphanam vs. Thanh Dat Investment | Alphanam vs. Vietnam Rubber Group |
| Danang Rubber vs. FIT INVEST JSC | Danang Rubber vs. Damsan JSC | Danang Rubber vs. An Phat Plastic | Danang Rubber 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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