Correlation Between Pha Le and Alphanam
Can any of the company-specific risk be diversified away by investing in both Pha Le and Alphanam 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 Pha Le and Alphanam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pha Le Plastics and Alphanam ME, you can compare the effects of market volatilities on Pha Le and Alphanam 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 Pha Le with a short position of Alphanam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Le and Alphanam.
Diversification Opportunities for Pha Le and Alphanam
Excellent diversification
The 3 months correlation between Pha and Alphanam is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pha Le Plastics and Alphanam ME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphanam ME and Pha Le 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 Pha Le Plastics are associated (or correlated) with Alphanam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphanam ME has no effect on the direction of Pha Le i.e., Pha Le and Alphanam go up and down completely randomly.
Pair Corralation between Pha Le and Alphanam
Assuming the 90 days trading horizon Pha Le Plastics is expected to generate 0.66 times more return on investment than Alphanam. However, Pha Le Plastics is 1.52 times less risky than Alphanam. It trades about 0.02 of its potential returns per unit of risk. Alphanam ME is currently generating about -0.07 per unit of risk. If you would invest 467,000 in Pha Le Plastics on October 30, 2024 and sell it today you would earn a total of 33,000 from holding Pha Le Plastics or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 65.05% |
| Values | Daily Returns |
Pha Le Plastics vs. Alphanam ME
Performance |
| Timeline |
| Pha Le Plastics |
| Alphanam ME |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pha Le and Alphanam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Le and Alphanam
The main advantage of trading using opposite Pha Le and Alphanam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Le position performs unexpectedly, Alphanam 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 Alphanam will offset losses from the drop in Alphanam's long position.| Pha Le vs. Japan Vietnam Medical | Pha Le vs. Hanoi Plastics JSC | Pha Le vs. An Phat Plastic | Pha Le vs. Tien Phong Plastic |
| Alphanam vs. Binh Duong Construction | Alphanam vs. Viettel Construction JSC | Alphanam vs. Hung Hau Agricultural | Alphanam vs. Binhthuan Agriculture Services |
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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