Correlation Between Alphanam and Tien Phong
Can any of the company-specific risk be diversified away by investing in both Alphanam and Tien Phong 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 Tien Phong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Tien Phong Plastic, you can compare the effects of market volatilities on Alphanam and Tien Phong 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 Tien Phong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Tien Phong.
Diversification Opportunities for Alphanam and Tien Phong
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alphanam and Tien is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Tien Phong Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Phong Plastic 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 Tien Phong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Phong Plastic has no effect on the direction of Alphanam i.e., Alphanam and Tien Phong go up and down completely randomly.
Pair Corralation between Alphanam and Tien Phong
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Tien Phong. In addition to that, Alphanam is 1.46 times more volatile than Tien Phong Plastic. It trades about -0.13 of its total potential returns per unit of risk. Tien Phong Plastic is currently generating about 0.09 per unit of volatility. If you would invest 3,896,342 in Tien Phong Plastic on August 29, 2024 and sell it today you would earn a total of 2,003,658 from holding Tien Phong Plastic or generate 51.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 46.8% |
| Values | Daily Returns |
Alphanam ME vs. Tien Phong Plastic
Performance |
| Timeline |
| Alphanam ME |
| Tien Phong Plastic |
Alphanam and Tien Phong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Tien Phong
The main advantage of trading using opposite Alphanam and Tien Phong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Tien Phong 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 Tien Phong will offset losses from the drop in Tien Phong's long position.| Alphanam vs. PetroVietnam Transportation Corp | Alphanam vs. Innovative Technology Development | Alphanam vs. Hai An Transport | Alphanam vs. Transimex Transportation JSC |
| Tien Phong vs. FIT INVEST JSC | Tien Phong vs. Damsan JSC | Tien Phong vs. An Phat Plastic | Tien Phong 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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