Correlation Between Adomos SA and Altarea SCA
Can any of the company-specific risk be diversified away by investing in both Adomos SA and Altarea SCA 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 Adomos SA and Altarea SCA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adomos SA and Altarea SCA, you can compare the effects of market volatilities on Adomos SA and Altarea SCA 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 Adomos SA with a short position of Altarea SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adomos SA and Altarea SCA.
Diversification Opportunities for Adomos SA and Altarea SCA
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Adomos and Altarea is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Adomos SA and Altarea SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altarea SCA and Adomos SA 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 Adomos SA are associated (or correlated) with Altarea SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altarea SCA has no effect on the direction of Adomos SA i.e., Adomos SA and Altarea SCA go up and down completely randomly.
Pair Corralation between Adomos SA and Altarea SCA
Assuming the 90 days trading horizon Adomos SA is expected to generate 11.9 times more return on investment than Altarea SCA. However, Adomos SA is 11.9 times more volatile than Altarea SCA. It trades about 0.07 of its potential returns per unit of risk. Altarea SCA is currently generating about -0.02 per unit of risk. If you would invest 0.04 in Adomos SA on September 3, 2024 and sell it today you would lose (0.02) from holding Adomos SA or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adomos SA vs. Altarea SCA
Performance |
| Timeline |
| Adomos SA |
| Altarea SCA |
Adomos SA and Altarea SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adomos SA and Altarea SCA
The main advantage of trading using opposite Adomos SA and Altarea SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adomos SA position performs unexpectedly, Altarea SCA 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 Altarea SCA will offset losses from the drop in Altarea SCA's long position.| Adomos SA vs. Acheter Louer | Adomos SA vs. Avenir Telecom SA | Adomos SA vs. Europlasma SA | Adomos SA vs. Neovacs SA |
| Altarea SCA vs. Icade SA | Altarea SCA vs. Covivio SA | Altarea SCA vs. Mercialys SA | Altarea SCA vs. Gecina SA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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