Correlation Between Altia Oyj and ALIOR BANK
Can any of the company-specific risk be diversified away by investing in both Altia Oyj and ALIOR BANK 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 Altia Oyj and ALIOR BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altia Oyj and ALIOR BANK, you can compare the effects of market volatilities on Altia Oyj and ALIOR BANK 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 Altia Oyj with a short position of ALIOR BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altia Oyj and ALIOR BANK.
Diversification Opportunities for Altia Oyj and ALIOR BANK
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Altia and ALIOR is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Altia Oyj and ALIOR BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIOR BANK and Altia Oyj 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 Altia Oyj are associated (or correlated) with ALIOR BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIOR BANK has no effect on the direction of Altia Oyj i.e., Altia Oyj and ALIOR BANK go up and down completely randomly.
Pair Corralation between Altia Oyj and ALIOR BANK
Assuming the 90 days horizon Altia Oyj is expected to under-perform the ALIOR BANK. But the stock apears to be less risky and, when comparing its historical volatility, Altia Oyj is 1.78 times less risky than ALIOR BANK. The stock trades about -0.25 of its potential returns per unit of risk. The ALIOR BANK is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 2,166 in ALIOR BANK on September 13, 2024 and sell it today you would lose (108.00) from holding ALIOR BANK or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altia Oyj vs. ALIOR BANK
Performance |
| Timeline |
| Altia Oyj |
| ALIOR BANK |
Altia Oyj and ALIOR BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altia Oyj and ALIOR BANK
The main advantage of trading using opposite Altia Oyj and ALIOR BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altia Oyj position performs unexpectedly, ALIOR BANK 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 ALIOR BANK will offset losses from the drop in ALIOR BANK's long position.| Altia Oyj vs. UNIVMUSIC GRPADR050 | Altia Oyj vs. International Consolidated Airlines | Altia Oyj vs. UNIVERSAL MUSIC GROUP | Altia Oyj vs. Nok Airlines PCL |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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