Correlation Between Allegroeu and SUNEX SA
Can any of the company-specific risk be diversified away by investing in both Allegroeu and SUNEX 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 Allegroeu and SUNEX SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegroeu SA and SUNEX SA, you can compare the effects of market volatilities on Allegroeu and SUNEX 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 Allegroeu with a short position of SUNEX SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegroeu and SUNEX SA.
Diversification Opportunities for Allegroeu and SUNEX SA
Very poor diversification
The 3 months correlation between Allegroeu and SUNEX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Allegroeu SA and SUNEX SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNEX SA and Allegroeu 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 Allegroeu SA are associated (or correlated) with SUNEX SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNEX SA has no effect on the direction of Allegroeu i.e., Allegroeu and SUNEX SA go up and down completely randomly.
Pair Corralation between Allegroeu and SUNEX SA
Assuming the 90 days trading horizon Allegroeu SA is expected to under-perform the SUNEX SA. In addition to that, Allegroeu is 1.96 times more volatile than SUNEX SA. It trades about -0.3 of its total potential returns per unit of risk. SUNEX SA is currently generating about -0.42 per unit of volatility. If you would invest 845.00 in SUNEX SA on September 1, 2024 and sell it today you would lose (115.00) from holding SUNEX SA or give up 13.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Allegroeu SA vs. SUNEX SA
Performance |
| Timeline |
| Allegroeu SA |
| SUNEX SA |
Allegroeu and SUNEX SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegroeu and SUNEX SA
The main advantage of trading using opposite Allegroeu and SUNEX SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegroeu position performs unexpectedly, SUNEX 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 SUNEX SA will offset losses from the drop in SUNEX SA's long position.| Allegroeu vs. Pyramid Games SA | Allegroeu vs. Detalion Games SA | Allegroeu vs. UniCredit SpA | Allegroeu vs. Carlson Investments SA |
| SUNEX SA vs. Banco Santander SA | SUNEX SA vs. UniCredit SpA | SUNEX SA vs. CEZ as | SUNEX SA vs. Polski Koncern Naftowy |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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