Correlation Between Alior Bank and Allegroeu
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Allegroeu 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 Allegroeu 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 Allegroeu SA, you can compare the effects of market volatilities on Alior Bank and Allegroeu 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 Allegroeu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Allegroeu.
Diversification Opportunities for Alior Bank and Allegroeu
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alior and Allegroeu is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Allegroeu SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegroeu 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 Allegroeu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegroeu SA has no effect on the direction of Alior Bank i.e., Alior Bank and Allegroeu go up and down completely randomly.
Pair Corralation between Alior Bank and Allegroeu
Assuming the 90 days trading horizon Alior Bank is expected to generate 1.76 times less return on investment than Allegroeu. But when comparing it to its historical volatility, Alior Bank SA is 1.22 times less risky than Allegroeu. It trades about 0.1 of its potential returns per unit of risk. Allegroeu SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,716 in Allegroeu SA on November 28, 2024 and sell it today you would earn a total of 195.00 from holding Allegroeu SA or generate 7.18% 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. Allegroeu SA
Performance |
| Timeline |
| Alior Bank SA |
| Allegroeu SA |
Alior Bank and Allegroeu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Allegroeu
The main advantage of trading using opposite Alior Bank and Allegroeu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Allegroeu 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 Allegroeu will offset losses from the drop in Allegroeu's long position.| Alior Bank vs. Immobile | Alior Bank vs. Varsav Game Studios | Alior Bank vs. mBank SA | Alior Bank vs. VR Factory Games |
| Allegroeu vs. UF Games SA | Allegroeu vs. Santander Bank Polska | Allegroeu vs. Quantum Software SA | Allegroeu vs. ING Bank lski |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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