Correlation Between Altia Consultores and Repsol
Can any of the company-specific risk be diversified away by investing in both Altia Consultores and Repsol 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 Altia Consultores and Repsol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altia Consultores SA and Repsol, you can compare the effects of market volatilities on Altia Consultores and Repsol 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 Altia Consultores with a short position of Repsol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altia Consultores and Repsol.
Diversification Opportunities for Altia Consultores and Repsol
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Altia and Repsol is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Altia Consultores SA and Repsol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repsol and Altia Consultores 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 Altia Consultores SA are associated (or correlated) with Repsol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repsol has no effect on the direction of Altia Consultores i.e., Altia Consultores and Repsol go up and down completely randomly.
Pair Corralation between Altia Consultores and Repsol
Assuming the 90 days trading horizon Altia Consultores SA is expected to under-perform the Repsol. But the stock apears to be less risky and, when comparing its historical volatility, Altia Consultores SA is 1.11 times less risky than Repsol. The stock trades about -0.09 of its potential returns per unit of risk. The Repsol is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,116 in Repsol on November 28, 2024 and sell it today you would earn a total of 126.00 from holding Repsol or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altia Consultores SA vs. Repsol
Performance |
| Timeline |
| Altia Consultores |
| Repsol |
Altia Consultores and Repsol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altia Consultores and Repsol
The main advantage of trading using opposite Altia Consultores and Repsol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altia Consultores position performs unexpectedly, Repsol 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 Repsol will offset losses from the drop in Repsol's long position.| Altia Consultores vs. Gigas Hosting SA | Altia Consultores vs. NBI Bearings Europe | Altia Consultores vs. Miquel y Costas | Altia Consultores vs. Global Dominion Access |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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