Correlation Between Alstom SA and Amatheon Agri
Can any of the company-specific risk be diversified away by investing in both Alstom SA and Amatheon Agri 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 Alstom SA and Amatheon Agri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alstom SA and Amatheon Agri Holding, you can compare the effects of market volatilities on Alstom SA and Amatheon Agri 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 Alstom SA with a short position of Amatheon Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstom SA and Amatheon Agri.
Diversification Opportunities for Alstom SA and Amatheon Agri
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alstom and Amatheon is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alstom SA and Amatheon Agri Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amatheon Agri Holding and Alstom SA 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 Alstom SA are associated (or correlated) with Amatheon Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amatheon Agri Holding has no effect on the direction of Alstom SA i.e., Alstom SA and Amatheon Agri go up and down completely randomly.
Pair Corralation between Alstom SA and Amatheon Agri
Assuming the 90 days trading horizon Alstom SA is expected to generate 0.13 times more return on investment than Amatheon Agri. However, Alstom SA is 7.41 times less risky than Amatheon Agri. It trades about 0.01 of its potential returns per unit of risk. Amatheon Agri Holding is currently generating about -0.04 per unit of risk. If you would invest 2,041 in Alstom SA on September 4, 2024 and sell it today you would lose (1.00) from holding Alstom SA or give up 0.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alstom SA vs. Amatheon Agri Holding
Performance |
| Timeline |
| Alstom SA |
| Amatheon Agri Holding |
Alstom SA and Amatheon Agri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstom SA and Amatheon Agri
The main advantage of trading using opposite Alstom SA and Amatheon Agri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstom SA position performs unexpectedly, Amatheon Agri 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 Amatheon Agri will offset losses from the drop in Amatheon Agri's long position.| Alstom SA vs. Bouygues SA | Alstom SA vs. Compagnie de Saint Gobain | Alstom SA vs. Veolia Environnement VE | Alstom SA vs. Vinci SA |
| Amatheon Agri vs. Agrogeneration | Amatheon Agri vs. Delfingen | Amatheon Agri vs. ST Dupont | Amatheon Agri vs. Burelle SA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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