Correlation Between Alior Bank and Primary Health
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Primary Health 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 Alior Bank and Primary Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alior Bank SA and Primary Health Properties, you can compare the effects of market volatilities on Alior Bank and Primary Health 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 Alior Bank with a short position of Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Primary Health.
Diversification Opportunities for Alior Bank and Primary Health
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alior and Primary is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties and Alior Bank 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 Alior Bank SA are associated (or correlated) with Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Alior Bank i.e., Alior Bank and Primary Health go up and down completely randomly.
Pair Corralation between Alior Bank and Primary Health
Assuming the 90 days trading horizon Alior Bank SA is expected to generate 4.11 times more return on investment than Primary Health. However, Alior Bank is 4.11 times more volatile than Primary Health Properties. It trades about 0.03 of its potential returns per unit of risk. Primary Health Properties is currently generating about 0.03 per unit of risk. If you would invest 7,950 in Alior Bank SA on December 4, 2024 and sell it today you would earn a total of 0.00 from holding Alior Bank SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. Primary Health Properties
Performance |
| Timeline |
| Alior Bank SA |
| Primary Health Properties |
Alior Bank and Primary Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Primary Health
The main advantage of trading using opposite Alior Bank and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Primary Health 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 Primary Health will offset losses from the drop in Primary Health's long position.| Alior Bank vs. AMG Advanced Metallurgical | Alior Bank vs. Taiwan Semiconductor Manufacturing | Alior Bank vs. Lowland Investment Co | Alior Bank vs. Vietnam Enterprise Investments |
| Primary Health vs. FinecoBank SpA | Primary Health vs. Nordea Bank Abp | Primary Health vs. Cembra Money Bank | Primary Health vs. Bank of Ireland |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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