Correlation Between Alior Bank and Centrum Finansowe
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Centrum Finansowe 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 Centrum Finansowe 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 Centrum Finansowe Banku, you can compare the effects of market volatilities on Alior Bank and Centrum Finansowe 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 Centrum Finansowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Centrum Finansowe.
Diversification Opportunities for Alior Bank and Centrum Finansowe
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alior and Centrum is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Centrum Finansowe Banku in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrum Finansowe Banku 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 Centrum Finansowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrum Finansowe Banku has no effect on the direction of Alior Bank i.e., Alior Bank and Centrum Finansowe go up and down completely randomly.
Pair Corralation between Alior Bank and Centrum Finansowe
Assuming the 90 days trading horizon Alior Bank SA is expected to generate 0.89 times more return on investment than Centrum Finansowe. However, Alior Bank SA is 1.13 times less risky than Centrum Finansowe. It trades about 0.09 of its potential returns per unit of risk. Centrum Finansowe Banku is currently generating about 0.01 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. Centrum Finansowe Banku
Performance |
| Timeline |
| Alior Bank SA |
| Centrum Finansowe Banku |
Alior Bank and Centrum Finansowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Centrum Finansowe
The main advantage of trading using opposite Alior Bank and Centrum Finansowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Centrum Finansowe 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 Centrum Finansowe will offset losses from the drop in Centrum Finansowe'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 |
| Centrum Finansowe vs. Intersport Polska SA | Centrum Finansowe vs. Drago entertainment SA | Centrum Finansowe vs. UF Games SA | Centrum Finansowe vs. PMPG Polskie Media |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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