Correlation Between Alior Bank and Carlson Investments
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Carlson Investments 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 Carlson Investments 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 Carlson Investments SA, you can compare the effects of market volatilities on Alior Bank and Carlson Investments 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 Carlson Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Carlson Investments.
Diversification Opportunities for Alior Bank and Carlson Investments
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alior and Carlson is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Carlson Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlson Investments 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 Carlson Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlson Investments has no effect on the direction of Alior Bank i.e., Alior Bank and Carlson Investments go up and down completely randomly.
Pair Corralation between Alior Bank and Carlson Investments
Assuming the 90 days trading horizon Alior Bank is expected to generate 2.4 times less return on investment than Carlson Investments. But when comparing it to its historical volatility, Alior Bank SA is 1.78 times less risky than Carlson Investments. It trades about 0.06 of its potential returns per unit of risk. Carlson Investments SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 419.00 in Carlson Investments SA on August 29, 2024 and sell it today you would earn a total of 23.00 from holding Carlson Investments SA or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Alior Bank SA vs. Carlson Investments SA
Performance |
| Timeline |
| Alior Bank SA |
| Carlson Investments |
Alior Bank and Carlson Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Carlson Investments
The main advantage of trading using opposite Alior Bank and Carlson Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Carlson Investments 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 Carlson Investments will offset losses from the drop in Carlson Investments' long position.| Alior Bank vs. SOFTWARE MANSION SPOLKA | Alior Bank vs. Noble Financials SA | Alior Bank vs. Quantum Software SA | Alior Bank vs. Enter Air SA |
| Carlson Investments vs. Centrum Finansowe Banku | Carlson Investments vs. Asseco Business Solutions | Carlson Investments vs. Detalion Games SA | Carlson Investments vs. CFI Holding 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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