Correlation Between Alfa Financial and Marks
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Marks 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 Marks 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 Marks and Spencer, you can compare the effects of market volatilities on Alfa Financial and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Marks.
Diversification Opportunities for Alfa Financial and Marks
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alfa and Marks is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Alfa Financial i.e., Alfa Financial and Marks go up and down completely randomly.
Pair Corralation between Alfa Financial and Marks
Assuming the 90 days trading horizon Alfa Financial is expected to generate 1.2 times less return on investment than Marks. But when comparing it to its historical volatility, Alfa Financial Software is 1.01 times less risky than Marks. It trades about 0.07 of its potential returns per unit of risk. Marks and Spencer is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Marks and Spencer on October 25, 2024 and sell it today you would earn a total of 99.00 from holding Marks and Spencer or generate 32.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Marks and Spencer
Performance |
| Timeline |
| Alfa Financial Software |
| Marks and Spencer |
Alfa Financial and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Marks
The main advantage of trading using opposite Alfa Financial and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Alfa Financial vs. Xinhua Winshare Publishing | Alfa Financial vs. CarsalesCom | Alfa Financial vs. Adtalem Global Education | Alfa Financial vs. STRAYER EDUCATION |
| Marks vs. IMAGIN MEDICAL INC | Marks vs. WESANA HEALTH HOLD | Marks vs. OPKO HEALTH | Marks vs. Advanced Medical Solutions |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |