Correlation Between Alfa Financial and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Auction Technology 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 Alfa Financial and Auction Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Auction Technology Group, you can compare the effects of market volatilities on Alfa Financial and Auction Technology 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 Alfa Financial with a short position of Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Auction Technology.
Diversification Opportunities for Alfa Financial and Auction Technology
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alfa and Auction is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Alfa Financial i.e., Alfa Financial and Auction Technology go up and down completely randomly.
Pair Corralation between Alfa Financial and Auction Technology
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 1.0 times more return on investment than Auction Technology. However, Alfa Financial is 1.0 times more volatile than Auction Technology Group. It trades about 0.04 of its potential returns per unit of risk. Auction Technology Group is currently generating about -0.05 per unit of risk. If you would invest 21,650 in Alfa Financial Software on August 28, 2024 and sell it today you would earn a total of 350.00 from holding Alfa Financial Software or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Auction Technology Group
Performance |
| Timeline |
| Alfa Financial Software |
| Auction Technology |
Alfa Financial and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Auction Technology
The main advantage of trading using opposite Alfa Financial and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Alfa Financial vs. Uniper SE | Alfa Financial vs. London Security Plc | Alfa Financial vs. SURETRACK MON | Alfa Financial vs. Ikigai Ventures |
| Auction Technology vs. Uniper SE | Auction Technology vs. London Security Plc | Auction Technology vs. SURETRACK MON | Auction Technology vs. Ikigai Ventures |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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