Correlation Between Khang Dien and Alphanam

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

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

Diversification Opportunities for Khang Dien and Alphanam

0.54

Correlation Coefficient

Khang Dien  Alphanam

Very weak diversification

The 3 months correlation between Khang and Alphanam is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Khang Dien House and Alphanam ME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphanam ME and Khang Dien 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 Khang Dien House 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 Khang Dien i.e., Khang Dien and Alphanam go up and down completely randomly.

Pair Corralation between Khang Dien and Alphanam

Assuming the 90 days trading horizon Khang Dien House is expected to generate 0.66 times more return on investment than Alphanam. However, Khang Dien House is 1.51 times less risky than Alphanam. It trades about 0.06 of its potential returns per unit of risk. Alphanam ME is currently generating about -0.07 per unit of risk. If you would invest  2,289,256  in Khang Dien House on September 26, 2024 and sell it today you would earn a total of  1,305,744  from holding Khang Dien House or generate 57.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	67.89%
Values	Daily Returns

Khang Dien House  vs.  Alphanam ME

Khang Dien House

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Khang Dien and Alphanam

The main advantage of trading using opposite Khang Dien and Alphanam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khang Dien 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 Khang Dien House 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.