Correlation Between Viet Nam and Alphanam
Can any of the company-specific risk be diversified away by investing in both Viet Nam 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 Viet Nam and Alphanam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viet Nam Construction and Alphanam ME, you can compare the effects of market volatilities on Viet Nam 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 Viet Nam with a short position of Alphanam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Nam and Alphanam.
Diversification Opportunities for Viet Nam and Alphanam
Very good diversification
The 3 months correlation between Viet and Alphanam is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Viet Nam Construction and Alphanam ME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphanam ME and Viet Nam 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 Viet Nam Construction 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 Viet Nam i.e., Viet Nam and Alphanam go up and down completely randomly.
Pair Corralation between Viet Nam and Alphanam
Assuming the 90 days trading horizon Viet Nam Construction is expected to generate 1.07 times more return on investment than Alphanam. However, Viet Nam is 1.07 times more volatile than Alphanam ME. It trades about 0.09 of its potential returns per unit of risk. Alphanam ME is currently generating about -0.12 per unit of risk. If you would invest 1,140,000 in Viet Nam Construction on October 22, 2024 and sell it today you would earn a total of 90,000 from holding Viet Nam Construction or generate 7.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.88% |
Values | Daily Returns |
Viet Nam Construction vs. Alphanam ME
Performance |
Timeline |
Viet Nam Construction |
Alphanam ME |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Viet Nam and Alphanam Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Viet Nam and Alphanam
The main advantage of trading using opposite Viet Nam and Alphanam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Nam 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.Viet Nam vs. Vietnam Petroleum Transport | Viet Nam vs. PetroVietnam Drilling Well | Viet Nam vs. Vnsteel Vicasa JSC | Viet Nam vs. Hai An Transport |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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