Correlation Between Alphanam and MST Investment

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

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

Diversification Opportunities for Alphanam and MST Investment

-0.74

Correlation Coefficient

Alphanam  MST Investment

Pay attention - limited upside

The 3 months correlation between Alphanam and MST is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and MST Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MST Investment JSC 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 MST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MST Investment JSC has no effect on the direction of Alphanam i.e., Alphanam and MST Investment go up and down completely randomly.

Pair Corralation between Alphanam and MST Investment

Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the MST Investment. In addition to that, Alphanam is 1.41 times more volatile than MST Investment JSC. It trades about -0.11 of its total potential returns per unit of risk. MST Investment JSC is currently generating about 0.05 per unit of volatility. If you would invest  520,000  in MST Investment JSC on September 14, 2024 and sell it today you would earn a total of  150,000  from holding MST Investment JSC or generate 28.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	49.81%
Values	Daily Returns

Alphanam ME  vs.  MST Investment JSC

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.

MST Investment JSC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MST Investment JSC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MST Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alphanam and MST Investment

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

The idea behind Alphanam ME and MST Investment JSC 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.