Correlation Between Alphanam and Binh Thanh
Can any of the company-specific risk be diversified away by investing in both Alphanam and Binh Thanh 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 Binh Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphanam ME and Binh Thanh Import, you can compare the effects of market volatilities on Alphanam and Binh Thanh 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 Binh Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Binh Thanh.
Diversification Opportunities for Alphanam and Binh Thanh
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphanam and Binh is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Binh Thanh Import in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Thanh Import 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 Binh Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Thanh Import has no effect on the direction of Alphanam i.e., Alphanam and Binh Thanh go up and down completely randomly.
Pair Corralation between Alphanam and Binh Thanh
Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Binh Thanh. But the stock apears to be less risky and, when comparing its historical volatility, Alphanam ME is 1.58 times less risky than Binh Thanh. The stock trades about -0.13 of its potential returns per unit of risk. The Binh Thanh Import is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 3,040,000 in Binh Thanh Import on September 23, 2024 and sell it today you would lose (770,000) from holding Binh Thanh Import or give up 25.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 57.58% |
Values | Daily Returns |
Alphanam ME vs. Binh Thanh Import
Performance |
Timeline |
Alphanam ME |
Binh Thanh Import |
Alphanam and Binh Thanh Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alphanam and Binh Thanh
The main advantage of trading using opposite Alphanam and Binh Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Binh Thanh 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 Binh Thanh will offset losses from the drop in Binh Thanh's long position.Alphanam vs. VTC Telecommunications JSC | ||
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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