Correlation Between Alior Bank and River
Can any of the company-specific risk be diversified away by investing in both Alior Bank and River 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 River 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 River and Mercantile, you can compare the effects of market volatilities on Alior Bank and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and River.
Diversification Opportunities for Alior Bank and River
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alior and River is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Alior Bank i.e., Alior Bank and River go up and down completely randomly.
Pair Corralation between Alior Bank and River
Assuming the 90 days trading horizon Alior Bank is expected to generate 384.0 times less return on investment than River. But when comparing it to its historical volatility, Alior Bank SA is 287.44 times less risky than River. It trades about 0.03 of its potential returns per unit of risk. River and Mercantile is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 15,300 in River and Mercantile on August 28, 2024 and sell it today you would earn a total of 2,650 from holding River and Mercantile or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alior Bank SA vs. River and Mercantile
Performance |
| Timeline |
| Alior Bank SA |
| River and Mercantile |
Alior Bank and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and River
The main advantage of trading using opposite Alior Bank and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.| Alior Bank vs. Toyota Motor Corp | Alior Bank vs. OTP Bank Nyrt | Alior Bank vs. Yum Brands | Alior Bank vs. Cognizant Technology Solutions |
| River vs. Southern Copper Corp | River vs. Sparebank 1 SR | River vs. Metals Exploration Plc | River vs. Alior Bank SA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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