Correlation Between Alphanam and Vina2 Investment

Can any of the company-specific risk be diversified away by investing in both Alphanam and Vina2 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 Vina2 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 Vina2 Investment and, you can compare the effects of market volatilities on Alphanam and Vina2 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 Vina2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphanam and Vina2 Investment.

Diversification Opportunities for Alphanam and Vina2 Investment

0.24

Correlation Coefficient

Alphanam  Vina2 Investment

Modest diversification

The 3 months correlation between Alphanam and Vina2 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Vina2 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina2 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 Vina2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina2 Investment has no effect on the direction of Alphanam i.e., Alphanam and Vina2 Investment go up and down completely randomly.

Pair Corralation between Alphanam and Vina2 Investment

Assuming the 90 days trading horizon Alphanam ME is expected to generate 2.18 times more return on investment than Vina2 Investment. However, Alphanam is 2.18 times more volatile than Vina2 Investment and. It trades about 0.22 of its potential returns per unit of risk. Vina2 Investment and is currently generating about -0.1 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	Very Weak
Accuracy	55.93%
Values	Daily Returns

Alphanam ME  vs.  Vina2 Investment and

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.

Vina2 Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vina2 Investment and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Alphanam and Vina2 Investment

The main advantage of trading using opposite Alphanam and Vina2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphanam position performs unexpectedly, Vina2 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 Vina2 Investment will offset losses from the drop in Vina2 Investment's long position.

The idea behind Alphanam ME and Vina2 Investment and 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.