Correlation Between Alphanam and Vietnam Construction
Can any of the company-specific risk be diversified away by investing in both Alphanam and Vietnam Construction 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 Construction 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 Construction JSC, you can compare the effects of market volatilities on Alphanam and Vietnam Construction 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 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Vietnam Construction.
Diversification Opportunities for Alphanam and Vietnam Construction
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphanam and Vietnam is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Vietnam Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Construction 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 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Construction JSC has no effect on the direction of Alphanam i.e., Alphanam and Vietnam Construction go up and down completely randomly.
Pair Corralation between Alphanam and Vietnam Construction
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Vietnam Construction. In addition to that, Alphanam is 5.91 times more volatile than Vietnam Construction JSC. It trades about -0.31 of its total potential returns per unit of risk. Vietnam Construction JSC is currently generating about 0.17 per unit of volatility. If you would invest 2,810,000 in Vietnam Construction JSC on August 30, 2024 and sell it today you would earn a total of 70,000 from holding Vietnam Construction JSC or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 43.48% |
| Values | Daily Returns |
Alphanam ME vs. Vietnam Construction JSC
Performance |
| Timeline |
| Alphanam ME |
| Vietnam Construction JSC |
Alphanam and Vietnam Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphanam and Vietnam Construction
The main advantage of trading using opposite Alphanam and Vietnam Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Vietnam Construction 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 Construction will offset losses from the drop in Vietnam Construction's long position.| Alphanam vs. Vu Dang Investment | Alphanam vs. BIDV Insurance Corp | Alphanam vs. Vien Dong Investment | Alphanam vs. TDG Global Investment |
| Vietnam Construction vs. Danang Rubber JSC | Vietnam Construction vs. Tay Ninh Rubber | Vietnam Construction vs. Viet Thanh Plastic | Vietnam Construction vs. Vinhomes JSC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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