Correlation Between Alior Bank and Izolacja Jarocin
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Izolacja Jarocin 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 Izolacja Jarocin 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 Izolacja Jarocin SA, you can compare the effects of market volatilities on Alior Bank and Izolacja Jarocin 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 Izolacja Jarocin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Izolacja Jarocin.
Diversification Opportunities for Alior Bank and Izolacja Jarocin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alior and Izolacja is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Izolacja Jarocin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Izolacja Jarocin 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 Izolacja Jarocin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Izolacja Jarocin has no effect on the direction of Alior Bank i.e., Alior Bank and Izolacja Jarocin go up and down completely randomly.
Pair Corralation between Alior Bank and Izolacja Jarocin
Assuming the 90 days trading horizon Alior Bank SA is expected to generate 0.77 times more return on investment than Izolacja Jarocin. However, Alior Bank SA is 1.3 times less risky than Izolacja Jarocin. It trades about 0.03 of its potential returns per unit of risk. Izolacja Jarocin SA is currently generating about 0.02 per unit of risk. If you would invest 8,504 in Alior Bank SA on December 2, 2024 and sell it today you would earn a total of 1,002 from holding Alior Bank SA or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. Izolacja Jarocin SA
Performance |
| Timeline |
| Alior Bank SA |
| Izolacja Jarocin |
Alior Bank and Izolacja Jarocin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Izolacja Jarocin
The main advantage of trading using opposite Alior Bank and Izolacja Jarocin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Izolacja Jarocin 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 Izolacja Jarocin will offset losses from the drop in Izolacja Jarocin's long position.| Alior Bank vs. SOFTWARE MANSION SPOLKA | Alior Bank vs. All In Games | Alior Bank vs. LSI Software SA | Alior Bank vs. Gaming Factory SA |
| Izolacja Jarocin vs. UniCredit SpA | Izolacja Jarocin vs. ING Bank lski | Izolacja Jarocin vs. VR Factory Games | Izolacja Jarocin vs. TEN SQUARE GAMES |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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