Correlation Between Alphanam and Vietnam Airlines
Can any of the company-specific risk be diversified away by investing in both Alphanam and Vietnam Airlines 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 Vietnam Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Vietnam Airlines JSC, you can compare the effects of market volatilities on Alphanam and Vietnam Airlines 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 Vietnam Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Vietnam Airlines.
Diversification Opportunities for Alphanam and Vietnam Airlines
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alphanam and Vietnam is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Vietnam Airlines JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Airlines 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 Vietnam Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Airlines JSC has no effect on the direction of Alphanam i.e., Alphanam and Vietnam Airlines go up and down completely randomly.
Pair Corralation between Alphanam and Vietnam Airlines
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Vietnam Airlines. In addition to that, Alphanam is 1.46 times more volatile than Vietnam Airlines JSC. It trades about -0.07 of its total potential returns per unit of risk. Vietnam Airlines JSC is currently generating about 0.35 per unit of volatility. If you would invest 2,250,000 in Vietnam Airlines JSC on September 2, 2024 and sell it today you would earn a total of 540,000 from holding Vietnam Airlines JSC or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
Alphanam ME vs. Vietnam Airlines JSC
Performance |
| Timeline |
| Alphanam ME |
| Vietnam Airlines JSC |
Alphanam and Vietnam Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Vietnam Airlines
The main advantage of trading using opposite Alphanam and Vietnam Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Vietnam Airlines 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 Vietnam Airlines will offset losses from the drop in Vietnam Airlines' long position.| Alphanam vs. FIT INVEST JSC | Alphanam vs. Damsan JSC | Alphanam vs. An Phat Plastic | Alphanam vs. APG Securities Joint |
| Vietnam Airlines vs. Song Hong Garment | Vietnam Airlines vs. Alphanam ME | Vietnam Airlines vs. Hochiminh City Metal | Vietnam Airlines vs. Atesco Industrial Cartering |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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