Correlation Between Alphanam and Techcom Vietnam

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

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

Diversification Opportunities for Alphanam and Techcom Vietnam

0.64

Correlation Coefficient

Alphanam  Techcom Vietnam

Poor diversification

The 3 months correlation between Alphanam and Techcom is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Techcom Vietnam REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techcom Vietnam REIT 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 Techcom Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techcom Vietnam REIT has no effect on the direction of Alphanam i.e., Alphanam and Techcom Vietnam go up and down completely randomly.

Pair Corralation between Alphanam and Techcom Vietnam

Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Techcom Vietnam. But the stock apears to be less risky and, when comparing its historical volatility, Alphanam ME is 1.21 times less risky than Techcom Vietnam. The stock trades about -0.08 of its potential returns per unit of risk. The Techcom Vietnam REIT is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  705,000  in Techcom Vietnam REIT on September 16, 2024 and sell it today you would lose (150,000) from holding Techcom Vietnam REIT or give up 21.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.06%
Values	Daily Returns

Alphanam ME  vs.  Techcom Vietnam REIT

Alphanam ME

Risk-Adjusted Performance

0 of 100

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 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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Techcom Vietnam REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Techcom Vietnam REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Techcom Vietnam is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alphanam and Techcom Vietnam

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

The idea behind Alphanam ME and Techcom Vietnam REIT 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.