Correlation Between Alior Bank and Tatton Asset
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Tatton Asset 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 Tatton Asset 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 Tatton Asset Management, you can compare the effects of market volatilities on Alior Bank and Tatton Asset 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 Tatton Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Tatton Asset.
Diversification Opportunities for Alior Bank and Tatton Asset
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alior and Tatton is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Tatton Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatton Asset Management 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 Tatton Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatton Asset Management has no effect on the direction of Alior Bank i.e., Alior Bank and Tatton Asset go up and down completely randomly.
Pair Corralation between Alior Bank and Tatton Asset
Assuming the 90 days trading horizon Alior Bank is expected to generate 9.26 times less return on investment than Tatton Asset. In addition to that, Alior Bank is 1.0 times more volatile than Tatton Asset Management. It trades about 0.01 of its total potential returns per unit of risk. Tatton Asset Management is currently generating about 0.08 per unit of volatility. If you would invest 59,276 in Tatton Asset Management on September 3, 2024 and sell it today you would earn a total of 9,724 from holding Tatton Asset Management or generate 16.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. Tatton Asset Management
Performance |
| Timeline |
| Alior Bank SA |
| Tatton Asset Management |
Alior Bank and Tatton Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Tatton Asset
The main advantage of trading using opposite Alior Bank and Tatton Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Tatton Asset 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 Tatton Asset will offset losses from the drop in Tatton Asset's long position.| Alior Bank vs. Endeavour Mining Corp | Alior Bank vs. AMG Advanced Metallurgical | Alior Bank vs. Thor Mining PLC | Alior Bank vs. iShares Physical Silver |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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