Correlation Between Alphanam and SSIAM VNFIN

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

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

Diversification Opportunities for Alphanam and SSIAM VNFIN

0.12

Correlation Coefficient

Alphanam  SSIAM VNFIN

Average diversification

The 3 months correlation between Alphanam and SSIAM is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and SSIAM VNFIN LEAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSIAM VNFIN LEAD 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 SSIAM VNFIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSIAM VNFIN LEAD has no effect on the direction of Alphanam i.e., Alphanam and SSIAM VNFIN go up and down completely randomly.

Pair Corralation between Alphanam and SSIAM VNFIN

Assuming the 90 days trading horizon Alphanam ME is expected to generate 4.07 times more return on investment than SSIAM VNFIN. However, Alphanam is 4.07 times more volatile than SSIAM VNFIN LEAD. It trades about 0.22 of its potential returns per unit of risk. SSIAM VNFIN LEAD is currently generating about 0.15 per unit of risk. If you would invest  480,000  in Alphanam ME on December 29, 2024 and sell it today you would earn a total of  150,000  from holding Alphanam ME or generate 31.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	55.0%
Values	Daily Returns

Alphanam ME  vs.  SSIAM VNFIN LEAD

Alphanam ME

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alphanam ME are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Alphanam displayed solid returns over the last few months and may actually be approaching a breakup point.

SSIAM VNFIN LEAD

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSIAM VNFIN LEAD are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, SSIAM VNFIN may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Alphanam and SSIAM VNFIN

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

The idea behind Alphanam ME and SSIAM VNFIN LEAD 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..