Correlation Between Alior Bank and Creotech Instruments
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Creotech Instruments 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 Creotech Instruments 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 Creotech Instruments SA, you can compare the effects of market volatilities on Alior Bank and Creotech Instruments 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 Creotech Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Creotech Instruments.
Diversification Opportunities for Alior Bank and Creotech Instruments
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alior and Creotech is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Creotech Instruments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creotech Instruments 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 Creotech Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creotech Instruments has no effect on the direction of Alior Bank i.e., Alior Bank and Creotech Instruments go up and down completely randomly.
Pair Corralation between Alior Bank and Creotech Instruments
Assuming the 90 days trading horizon Alior Bank SA is expected to under-perform the Creotech Instruments. In addition to that, Alior Bank is 1.21 times more volatile than Creotech Instruments SA. It trades about -0.14 of its total potential returns per unit of risk. Creotech Instruments SA is currently generating about -0.09 per unit of volatility. If you would invest 15,700 in Creotech Instruments SA on September 12, 2024 and sell it today you would lose (500.00) from holding Creotech Instruments SA or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. Creotech Instruments SA
Performance |
| Timeline |
| Alior Bank SA |
| Creotech Instruments |
Alior Bank and Creotech Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Creotech Instruments
The main advantage of trading using opposite Alior Bank and Creotech Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Creotech Instruments 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 Creotech Instruments will offset losses from the drop in Creotech Instruments' long position.| Alior Bank vs. Banco Santander SA | Alior Bank vs. Asseco Business Solutions | Alior Bank vs. Detalion Games SA | Alior Bank vs. Asseco South Eastern |
| Creotech Instruments vs. Action SA | Creotech Instruments vs. Asseco Business Solutions | Creotech Instruments vs. Detalion Games SA | Creotech Instruments vs. Asseco South Eastern |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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