Correlation Between Alphanam and Kien Giang

Can any of the company-specific risk be diversified away by investing in both Alphanam and Kien Giang 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 Kien Giang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alphanam ME and Kien Giang Construction, you can compare the effects of market volatilities on Alphanam and Kien Giang 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 Kien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Kien Giang.

Diversification Opportunities for Alphanam and Kien Giang

0.81

Correlation Coefficient

Alphanam  Kien Giang

Very poor diversification

The 3 months correlation between Alphanam and Kien is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Kien Giang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kien Giang Construction 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 Kien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kien Giang Construction has no effect on the direction of Alphanam i.e., Alphanam and Kien Giang go up and down completely randomly.

Pair Corralation between Alphanam and Kien Giang

Assuming the 90 days trading horizon Alphanam is expected to generate 19.92 times less return on investment than Kien Giang. But when comparing it to its historical volatility, Alphanam ME is 1.67 times less risky than Kien Giang. It trades about 0.01 of its potential returns per unit of risk. Kien Giang Construction is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,930,000  in Kien Giang Construction on December 3, 2024 and sell it today you would earn a total of  80,000  from holding Kien Giang Construction or generate 4.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	54.55%
Values	Daily Returns

Alphanam ME  vs.  Kien Giang Construction

Alphanam ME

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphanam ME has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Alphanam is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Kien Giang Construction

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kien Giang Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alphanam and Kien Giang

The main advantage of trading using opposite Alphanam and Kien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Kien Giang 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 Kien Giang will offset losses from the drop in Kien Giang's long position.

The idea behind Alphanam ME and Kien Giang Construction pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.