Correlation Between Alfa Financial and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Cornish Metals 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 Cornish Metals 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 Cornish Metals, you can compare the effects of market volatilities on Alfa Financial and Cornish Metals 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 Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Cornish Metals.
Diversification Opportunities for Alfa Financial and Cornish Metals
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alfa and Cornish is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals 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 Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Alfa Financial i.e., Alfa Financial and Cornish Metals go up and down completely randomly.
Pair Corralation between Alfa Financial and Cornish Metals
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 0.59 times more return on investment than Cornish Metals. However, Alfa Financial Software is 1.7 times less risky than Cornish Metals. It trades about 0.05 of its potential returns per unit of risk. Cornish Metals is currently generating about -0.02 per unit of risk. If you would invest 21,350 in Alfa Financial Software on August 25, 2024 and sell it today you would earn a total of 450.00 from holding Alfa Financial Software or generate 2.11% 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. Cornish Metals
Performance |
| Timeline |
| Alfa Financial Software |
| Cornish Metals |
Alfa Financial and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Cornish Metals
The main advantage of trading using opposite Alfa Financial and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Cornish Metals 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 Cornish Metals will offset losses from the drop in Cornish Metals' 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 |
| Cornish Metals vs. Givaudan SA | Cornish Metals vs. Antofagasta PLC | Cornish Metals vs. Amaroq Minerals | Cornish Metals vs. Central Asia Metals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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