Correlation Between Cardano and ALD SA
Can any of the company-specific risk be diversified away by investing in both Cardano and ALD 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 Cardano and ALD SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and ALD SA, you can compare the effects of market volatilities on Cardano and ALD 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 Cardano with a short position of ALD SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and ALD SA.
Diversification Opportunities for Cardano and ALD SA
Good diversification
The 3 months correlation between Cardano and ALD is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and ALD SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALD SA and Cardano 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 Cardano are associated (or correlated) with ALD SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALD SA has no effect on the direction of Cardano i.e., Cardano and ALD SA go up and down completely randomly.
Pair Corralation between Cardano and ALD SA
Assuming the 90 days trading horizon Cardano is expected to generate 1.81 times less return on investment than ALD SA. In addition to that, Cardano is 2.39 times more volatile than ALD SA. It trades about 0.06 of its total potential returns per unit of risk. ALD SA is currently generating about 0.25 per unit of volatility. If you would invest 618.00 in ALD SA on October 24, 2024 and sell it today you would earn a total of 84.00 from holding ALD SA or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Cardano vs. ALD SA
Performance |
| Timeline |
| Cardano |
| ALD SA |
Cardano and ALD SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and ALD SA
The main advantage of trading using opposite Cardano and ALD SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, ALD 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 ALD SA will offset losses from the drop in ALD SA's long position.The idea behind Cardano and ALD SA 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.| ALD SA vs. Gaztransport Technigaz SAS | ALD SA vs. Union Technologies Informatique | ALD SA vs. Affluent Medical SAS | ALD SA vs. Sartorius Stedim Biotech |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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