Correlation Between Tin Nghia and Alphanam

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

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

Diversification Opportunities for Tin Nghia and Alphanam

-0.07

Correlation Coefficient

Tin Nghia  Alphanam

Good diversification

The 3 months correlation between Tin and Alphanam is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tin Nghia Industrial and Alphanam ME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphanam ME and Tin Nghia 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 Tin Nghia Industrial 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 Tin Nghia i.e., Tin Nghia and Alphanam go up and down completely randomly.

Pair Corralation between Tin Nghia and Alphanam

Assuming the 90 days trading horizon Tin Nghia Industrial is expected to generate 0.54 times more return on investment than Alphanam. However, Tin Nghia Industrial is 1.86 times less risky than Alphanam. It trades about -0.02 of its potential returns per unit of risk. Alphanam ME is currently generating about -0.05 per unit of risk. If you would invest  2,107,566  in Tin Nghia Industrial on October 26, 2024 and sell it today you would lose (57,566) from holding Tin Nghia Industrial or give up 2.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.79%
Values	Daily Returns

Tin Nghia Industrial  vs.  Alphanam ME

Tin Nghia Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tin Nghia Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Tin Nghia is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the 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 latest unfluctuating performance, the Stock's technical and fundamental 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 Tin Nghia and Alphanam

The main advantage of trading using opposite Tin Nghia and Alphanam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tin Nghia 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 Tin Nghia Industrial 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.