Correlation Between Agroliga Group and Alior Bank

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Can any of the company-specific risk be diversified away by investing in both Agroliga Group 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 Agroliga Group and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agroliga Group PLC and Alior Bank SA, you can compare the effects of market volatilities on Agroliga Group 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 Agroliga Group with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agroliga Group and Alior Bank.

Diversification Opportunities for Agroliga Group and Alior Bank

-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between Agroliga and Alior is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Agroliga Group PLC and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and Agroliga Group 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 Agroliga Group PLC 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 SA has no effect on the direction of Agroliga Group i.e., Agroliga Group and Alior Bank go up and down completely randomly.

Pair Corralation between Agroliga Group and Alior Bank

Assuming the 90 days trading horizon Agroliga Group PLC is expected to under-perform the Alior Bank. But the stock apears to be less risky and, when comparing its historical volatility, Agroliga Group PLC is 1.05 times less risky than Alior Bank. The stock trades about -0.12 of its potential returns per unit of risk. The Alior Bank SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  9,132  in Alior Bank SA on August 24, 2024 and sell it today you would lose (372.00) from holding Alior Bank SA or give up 4.07% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

Agroliga Group PLC  vs.  Alior Bank SA

 Performance 
       Timeline  
Agroliga Group PLC 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Agroliga Group PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Agroliga Group may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Alior Bank SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Alior Bank SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Agroliga Group and Alior Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agroliga Group and Alior Bank

The main advantage of trading using opposite Agroliga Group and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agroliga Group 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.
The idea behind Agroliga Group PLC and Alior Bank 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.
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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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