Correlation Between Alior Bank and Grupa HRC
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Grupa HRC 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 Grupa HRC 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 Grupa HRC SA, you can compare the effects of market volatilities on Alior Bank and Grupa HRC 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 Grupa HRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Grupa HRC.
Diversification Opportunities for Alior Bank and Grupa HRC
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alior and Grupa is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Grupa HRC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa HRC 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 Grupa HRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa HRC SA has no effect on the direction of Alior Bank i.e., Alior Bank and Grupa HRC go up and down completely randomly.
Pair Corralation between Alior Bank and Grupa HRC
Assuming the 90 days trading horizon Alior Bank SA is expected to generate 0.53 times more return on investment than Grupa HRC. However, Alior Bank SA is 1.9 times less risky than Grupa HRC. It trades about -0.02 of its potential returns per unit of risk. Grupa HRC SA is currently generating about -0.09 per unit of risk. If you would invest 9,268 in Alior Bank SA on August 30, 2024 and sell it today you would lose (276.00) from holding Alior Bank SA or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 45.24% |
| Values | Daily Returns |
Alior Bank SA vs. Grupa HRC SA
Performance |
| Timeline |
| Alior Bank SA |
| Grupa HRC SA |
Alior Bank and Grupa HRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Grupa HRC
The main advantage of trading using opposite Alior Bank and Grupa HRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Grupa HRC 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 Grupa HRC will offset losses from the drop in Grupa HRC'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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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