Correlation Between Alphanam and Tien Phong

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

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

Diversification Opportunities for Alphanam and Tien Phong

-0.14

Correlation Coefficient

Alphanam  Tien Phong

Good diversification

The 3 months correlation between Alphanam and Tien is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Tien Phong Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Phong Plastic 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 Tien Phong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Phong Plastic has no effect on the direction of Alphanam i.e., Alphanam and Tien Phong go up and down completely randomly.

Pair Corralation between Alphanam and Tien Phong

Assuming the 90 days trading horizon Alphanam is expected to generate 7.84 times less return on investment than Tien Phong. In addition to that, Alphanam is 1.2 times more volatile than Tien Phong Plastic. It trades about 0.01 of its total potential returns per unit of risk. Tien Phong Plastic is currently generating about 0.1 per unit of volatility. If you would invest  6,017,846  in Tien Phong Plastic on December 3, 2024 and sell it today you would earn a total of  572,154  from holding Tien Phong Plastic or generate 9.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.85%
Values	Daily Returns

Alphanam ME  vs.  Tien Phong Plastic

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.

Tien Phong Plastic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tien Phong Plastic are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tien Phong may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Alphanam and Tien Phong

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

The idea behind Alphanam ME and Tien Phong Plastic 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.