Correlation Between Alfa Financial and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and WIMFARM SA 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 Alfa Financial and WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and WIMFARM SA EO, you can compare the effects of market volatilities on Alfa Financial and WIMFARM SA 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 Alfa Financial with a short position of WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and WIMFARM SA.
Diversification Opportunities for Alfa Financial and WIMFARM SA
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alfa and WIMFARM is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Alfa Financial i.e., Alfa Financial and WIMFARM SA go up and down completely randomly.
Pair Corralation between Alfa Financial and WIMFARM SA
Assuming the 90 days trading horizon Alfa Financial Software is expected to under-perform the WIMFARM SA. But the stock apears to be less risky and, when comparing its historical volatility, Alfa Financial Software is 3.31 times less risky than WIMFARM SA. The stock trades about -0.42 of its potential returns per unit of risk. The WIMFARM SA EO is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 357.00 in WIMFARM SA EO on October 12, 2024 and sell it today you would earn a total of 40.00 from holding WIMFARM SA EO or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. WIMFARM SA EO
Performance |
| Timeline |
| Alfa Financial Software |
| WIMFARM SA EO |
Alfa Financial and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and WIMFARM SA
The main advantage of trading using opposite Alfa Financial and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Alfa Financial vs. Gruppo Mutuionline SpA | Alfa Financial vs. CompuGroup Medical SE | Alfa Financial vs. ZhongAn Online P | Alfa Financial vs. PULSION Medical Systems |
| WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. NMI Holdings | WIMFARM SA vs. SIVERS SEMICONDUCTORS AB | WIMFARM SA vs. Talanx AG |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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