Correlation Between Duc Thanh and Alphanam

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

By analyzing existing cross correlation between Duc Thanh Wood and Alphanam ME, you can compare the effects of market volatilities on Duc Thanh and Alphanam 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 Duc Thanh with a short position of Alphanam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duc Thanh and Alphanam.

Diversification Opportunities for Duc Thanh and Alphanam

0.0

Correlation Coefficient

Duc Thanh  Alphanam

Pay attention - limited upside

The 3 months correlation between Duc and Alphanam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Duc Thanh Wood and Alphanam ME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphanam ME and Duc Thanh 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 Duc Thanh Wood are associated (or correlated) with Alphanam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphanam ME has no effect on the direction of Duc Thanh i.e., Duc Thanh and Alphanam go up and down completely randomly.

Pair Corralation between Duc Thanh and Alphanam

Assuming the 90 days trading horizon Duc Thanh Wood is expected to under-perform the Alphanam. But the stock apears to be less risky and, when comparing its historical volatility, Duc Thanh Wood is 3.75 times less risky than Alphanam. The stock trades about -0.23 of its potential returns per unit of risk. The Alphanam ME is currently generating about 0.22 of returns per unit of risk over similar time horizon. 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	Flat
Strength	Insignificant
Accuracy	55.0%
Values	Daily Returns

Duc Thanh Wood  vs.  Alphanam ME

Duc Thanh Wood

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duc Thanh Wood 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 basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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.

Pair Trading with Duc Thanh and Alphanam

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

The idea behind Duc Thanh Wood and Alphanam ME 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.