Correlation Between Alphanam and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Alphanam and Tin Nghia 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 Tin Nghia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Tin Nghia Industrial, you can compare the effects of market volatilities on Alphanam and Tin Nghia 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 Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Tin Nghia.
Diversification Opportunities for Alphanam and Tin Nghia
Poor diversification
The 3 months correlation between Alphanam and Tin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Tin Nghia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tin Nghia Industrial 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 Tin Nghia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tin Nghia Industrial has no effect on the direction of Alphanam i.e., Alphanam and Tin Nghia go up and down completely randomly.
Pair Corralation between Alphanam and Tin Nghia
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Tin Nghia. In addition to that, Alphanam is 1.31 times more volatile than Tin Nghia Industrial. It trades about -0.08 of its total potential returns per unit of risk. Tin Nghia Industrial is currently generating about -0.06 per unit of volatility. If you would invest 2,235,000 in Tin Nghia Industrial on August 28, 2024 and sell it today you would lose (55,000) from holding Tin Nghia Industrial or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 47.62% |
| Values | Daily Returns |
Alphanam ME vs. Tin Nghia Industrial
Performance |
| Timeline |
| Alphanam ME |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tin Nghia Industrial |
Alphanam and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Tin Nghia
The main advantage of trading using opposite Alphanam and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Tin Nghia 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 Tin Nghia will offset losses from the drop in Tin Nghia's long position.| Alphanam vs. FIT INVEST JSC | Alphanam vs. Damsan JSC | Alphanam vs. An Phat Plastic | Alphanam vs. APG Securities Joint |
| Tin Nghia vs. FIT INVEST JSC | Tin Nghia vs. Damsan JSC | Tin Nghia vs. An Phat Plastic | Tin Nghia vs. APG Securities Joint |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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