Correlation Between ALIOR BANK and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both ALIOR BANK and Strategic Investments 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 Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALIOR BANK and Strategic Investments AS, you can compare the effects of market volatilities on ALIOR BANK and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALIOR BANK and Strategic Investments.
Diversification Opportunities for ALIOR BANK and Strategic Investments
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ALIOR and Strategic is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ALIOR BANK and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of ALIOR BANK i.e., ALIOR BANK and Strategic Investments go up and down completely randomly.
Pair Corralation between ALIOR BANK and Strategic Investments
Assuming the 90 days trading horizon ALIOR BANK is expected to generate 0.82 times more return on investment than Strategic Investments. However, ALIOR BANK is 1.21 times less risky than Strategic Investments. It trades about 0.02 of its potential returns per unit of risk. Strategic Investments AS is currently generating about -0.31 per unit of risk. If you would invest 2,027 in ALIOR BANK on September 20, 2024 and sell it today you would earn a total of 13.00 from holding ALIOR BANK or generate 0.64% 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 vs. Strategic Investments AS
Performance |
| Timeline |
| ALIOR BANK |
| Strategic Investments |
ALIOR BANK and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALIOR BANK and Strategic Investments
The main advantage of trading using opposite ALIOR BANK and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALIOR BANK position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.The idea behind ALIOR BANK and Strategic Investments AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. SIVERS SEMICONDUCTORS AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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