Correlation Between Alior Bank and Esotiq Henderson
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Esotiq Henderson 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 Esotiq Henderson 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 Esotiq Henderson SA, you can compare the effects of market volatilities on Alior Bank and Esotiq Henderson 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 Esotiq Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Esotiq Henderson.
Diversification Opportunities for Alior Bank and Esotiq Henderson
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alior and Esotiq is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Esotiq Henderson SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esotiq Henderson 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 Esotiq Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esotiq Henderson has no effect on the direction of Alior Bank i.e., Alior Bank and Esotiq Henderson go up and down completely randomly.
Pair Corralation between Alior Bank and Esotiq Henderson
Assuming the 90 days trading horizon Alior Bank SA is expected to under-perform the Esotiq Henderson. In addition to that, Alior Bank is 3.02 times more volatile than Esotiq Henderson SA. It trades about -0.02 of its total potential returns per unit of risk. Esotiq Henderson SA is currently generating about 0.0 per unit of volatility. If you would invest 4,600 in Esotiq Henderson SA on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Esotiq Henderson SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. Esotiq Henderson SA
Performance |
| Timeline |
| Alior Bank SA |
| Esotiq Henderson |
Alior Bank and Esotiq Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Esotiq Henderson
The main advantage of trading using opposite Alior Bank and Esotiq Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Esotiq Henderson 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 Esotiq Henderson will offset losses from the drop in Esotiq Henderson's long position.| Alior Bank vs. Banco Santander SA | Alior Bank vs. Asseco Business Solutions | Alior Bank vs. Detalion Games SA | Alior Bank vs. CFI Holding SA |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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