Correlation Between Alfa Financial and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on Alfa Financial and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Bankers Investment.
Diversification Opportunities for Alfa Financial and Bankers Investment
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alfa and Bankers is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Alfa Financial i.e., Alfa Financial and Bankers Investment go up and down completely randomly.
Pair Corralation between Alfa Financial and Bankers Investment
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 4.5 times more return on investment than Bankers Investment. However, Alfa Financial is 4.5 times more volatile than Bankers Investment Trust. It trades about 0.13 of its potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.14 per unit of risk. If you would invest 20,700 in Alfa Financial Software on August 24, 2024 and sell it today you would earn a total of 1,400 from holding Alfa Financial Software or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Bankers Investment Trust
Performance |
| Timeline |
| Alfa Financial Software |
| Bankers Investment Trust |
Alfa Financial and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Bankers Investment
The main advantage of trading using opposite Alfa Financial and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Alfa Financial vs. Samsung Electronics Co | Alfa Financial vs. Samsung Electronics Co | Alfa Financial vs. Hyundai Motor | Alfa Financial vs. Toyota Motor Corp |
| Bankers Investment vs. Home Depot | Bankers Investment vs. River and Mercantile | Bankers Investment vs. Chrysalis Investments | Bankers Investment vs. Sherborne Investors Guernsey |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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