Correlation Between Altheora and Egide SA
Can any of the company-specific risk be diversified away by investing in both Altheora and Egide 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 Altheora and Egide SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altheora SA and Egide SA, you can compare the effects of market volatilities on Altheora and Egide 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 Altheora with a short position of Egide SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altheora and Egide SA.
Diversification Opportunities for Altheora and Egide SA
Significant diversification
The 3 months correlation between Altheora and Egide is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Altheora SA and Egide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egide SA and Altheora 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 Altheora SA are associated (or correlated) with Egide SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egide SA has no effect on the direction of Altheora i.e., Altheora and Egide SA go up and down completely randomly.
Pair Corralation between Altheora and Egide SA
Assuming the 90 days trading horizon Altheora SA is expected to under-perform the Egide SA. In addition to that, Altheora is 1.15 times more volatile than Egide SA. It trades about -0.02 of its total potential returns per unit of risk. Egide SA is currently generating about 0.01 per unit of volatility. If you would invest 52.00 in Egide SA on September 3, 2024 and sell it today you would lose (13.00) from holding Egide SA or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altheora SA vs. Egide SA
Performance |
| Timeline |
| Altheora SA |
| Egide SA |
Altheora and Egide SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altheora and Egide SA
The main advantage of trading using opposite Altheora and Egide SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altheora position performs unexpectedly, Egide 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 Egide SA will offset losses from the drop in Egide SA's long position.| Altheora vs. LVMH Mot Hennessy | Altheora vs. LOreal SA | Altheora vs. Hermes International SCA | Altheora vs. Manitou BF 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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