Correlation Between Alphanam and Century Synthetic
Can any of the company-specific risk be diversified away by investing in both Alphanam and Century Synthetic 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 Century Synthetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Century Synthetic Fiber, you can compare the effects of market volatilities on Alphanam and Century Synthetic 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 Century Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Century Synthetic.
Diversification Opportunities for Alphanam and Century Synthetic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphanam and Century is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Century Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Synthetic Fiber 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 Century Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Synthetic Fiber has no effect on the direction of Alphanam i.e., Alphanam and Century Synthetic go up and down completely randomly.
Pair Corralation between Alphanam and Century Synthetic
Assuming the 90 days trading horizon Alphanam ME is expected to generate 3.88 times more return on investment than Century Synthetic. However, Alphanam is 3.88 times more volatile than Century Synthetic Fiber. It trades about -0.03 of its potential returns per unit of risk. Century Synthetic Fiber is currently generating about -0.15 per unit of risk. If you would invest 500,000 in Alphanam ME on November 6, 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 | 46.55% |
| Values | Daily Returns |
Alphanam ME vs. Century Synthetic Fiber
Performance |
| Timeline |
| Alphanam ME |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Century Synthetic Fiber |
Alphanam and Century Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Century Synthetic
The main advantage of trading using opposite Alphanam and Century Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Century Synthetic 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 Century Synthetic will offset losses from the drop in Century Synthetic's long position.| Alphanam vs. Song Hong Garment | Alphanam vs. South Basic Chemicals | Alphanam vs. Cuu Long Petro | Alphanam vs. SSIAM VNFIN LEAD |
| Century Synthetic vs. Petrolimex Petrochemical JSC | Century Synthetic vs. AgriBank Securities JSC | Century Synthetic vs. Hai An Transport |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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