Correlation Between Alphanam and Din Capital

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

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

Diversification Opportunities for Alphanam and Din Capital

-0.6

Correlation Coefficient

Alphanam  Din Capital

Excellent diversification

The 3 months correlation between Alphanam and Din is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Din Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Din Capital Investment 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 Din Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Din Capital Investment has no effect on the direction of Alphanam i.e., Alphanam and Din Capital go up and down completely randomly.

Pair Corralation between Alphanam and Din Capital

Assuming the 90 days trading horizon Alphanam ME is expected to under-perform the Din Capital. In addition to that, Alphanam is 2.33 times more volatile than Din Capital Investment. It trades about -0.18 of its total potential returns per unit of risk. Din Capital Investment is currently generating about -0.05 per unit of volatility. If you would invest  1,040,000  in Din Capital Investment on September 15, 2024 and sell it today you would lose (20,000) from holding Din Capital Investment or give up 1.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	63.64%
Values	Daily Returns

Alphanam ME  vs.  Din Capital Investment

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.

Din Capital Investment

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alphanam and Din Capital

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

The idea behind Alphanam ME and Din Capital Investment 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.