Correlation Between Alior Bank and Alta SA
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Alta 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 Alior Bank and Alta SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alior Bank SA and Alta SA, you can compare the effects of market volatilities on Alior Bank and Alta 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 Alior Bank with a short position of Alta SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Alta SA.
Diversification Opportunities for Alior Bank and Alta SA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alior and Alta is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Alta SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta SA and Alior Bank 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 Alior Bank SA are associated (or correlated) with Alta SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta SA has no effect on the direction of Alior Bank i.e., Alior Bank and Alta SA go up and down completely randomly.
Pair Corralation between Alior Bank and Alta SA
Assuming the 90 days trading horizon Alior Bank SA is expected to generate 0.86 times more return on investment than Alta SA. However, Alior Bank SA is 1.16 times less risky than Alta SA. It trades about 0.09 of its potential returns per unit of risk. Alta SA is currently generating about -0.03 per unit of risk. If you would invest 8,740 in Alior Bank SA on September 1, 2024 and sell it today you would earn a total of 390.00 from holding Alior Bank SA or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. Alta SA
Performance |
| Timeline |
| Alior Bank SA |
| Alta SA |
Alior Bank and Alta SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Alta SA
The main advantage of trading using opposite Alior Bank and Alta SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Alta 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 Alta SA will offset losses from the drop in Alta SA's long position.| Alior Bank vs. Asseco Business Solutions | Alior Bank vs. Detalion Games SA | Alior Bank vs. Asseco South Eastern | Alior Bank vs. CFI Holding SA |
| Alta SA vs. Alior Bank SA | Alta SA vs. SOFTWARE MANSION SPOLKA | Alta SA vs. Echo Investment SA | Alta SA vs. Investment Friends Capital |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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