Correlation Between Alphanam and Vien Dong

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

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

Diversification Opportunities for Alphanam and Vien Dong

-0.1

Correlation Coefficient

Alphanam  Vien Dong

Good diversification

The 3 months correlation between Alphanam and Vien is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Alphanam ME and Vien Dong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vien Dong 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 Vien Dong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vien Dong Investment has no effect on the direction of Alphanam i.e., Alphanam and Vien Dong go up and down completely randomly.

Pair Corralation between Alphanam and Vien Dong

Assuming the 90 days trading horizon Alphanam ME is expected to generate 2.19 times more return on investment than Vien Dong. However, Alphanam is 2.19 times more volatile than Vien Dong Investment. It trades about 0.22 of its potential returns per unit of risk. Vien Dong Investment is currently generating about 0.06 per unit of risk. If you would invest  480,000  in Alphanam ME on December 30, 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 Against
Strength	Insignificant
Accuracy	56.9%
Values	Daily Returns

Alphanam ME  vs.  Vien Dong Investment

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.

Vien Dong Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vien Dong Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Vien Dong may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Alphanam and Vien Dong

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

The idea behind Alphanam ME and Vien Dong 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.