Correlation Between Transimex Transportation and Alphanam

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

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

Diversification Opportunities for Transimex Transportation and Alphanam

0.85

Correlation Coefficient

Transimex Transportation  Alphanam

Very poor diversification

The 3 months correlation between Transimex and Alphanam is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Transimex Transportation JSC and Alphanam ME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphanam ME and Transimex Transportation 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 Transimex Transportation JSC 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 Transimex Transportation i.e., Transimex Transportation and Alphanam go up and down completely randomly.

Pair Corralation between Transimex Transportation and Alphanam

Assuming the 90 days trading horizon Transimex Transportation JSC is expected to generate 0.96 times more return on investment than Alphanam. However, Transimex Transportation JSC is 1.04 times less risky than Alphanam. It trades about -0.03 of its potential returns per unit of risk. Alphanam ME is currently generating about -0.17 per unit of risk. If you would invest  1,810,000  in Transimex Transportation JSC on September 12, 2024 and sell it today you would lose (90,000) from holding Transimex Transportation JSC or give up 4.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	82.5%
Values	Daily Returns

Transimex Transportation JSC  vs.  Alphanam ME

Transimex Transportation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transimex Transportation JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Transimex Transportation 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 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 Transimex Transportation and Alphanam

The main advantage of trading using opposite Transimex Transportation and Alphanam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transimex Transportation 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 Transimex Transportation JSC 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.