Correlation Between Alior Bank and Pyramid Games
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Pyramid Games 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 Pyramid Games 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 Pyramid Games SA, you can compare the effects of market volatilities on Alior Bank and Pyramid Games 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 Pyramid Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Pyramid Games.
Diversification Opportunities for Alior Bank and Pyramid Games
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alior and Pyramid is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Pyramid Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyramid Games 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 Pyramid Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyramid Games SA has no effect on the direction of Alior Bank i.e., Alior Bank and Pyramid Games go up and down completely randomly.
Pair Corralation between Alior Bank and Pyramid Games
Assuming the 90 days trading horizon Alior Bank is expected to generate 2.61 times less return on investment than Pyramid Games. But when comparing it to its historical volatility, Alior Bank SA is 2.56 times less risky than Pyramid Games. It trades about 0.13 of its potential returns per unit of risk. Pyramid Games SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,060 in Pyramid Games SA on November 18, 2024 and sell it today you would earn a total of 70.00 from holding Pyramid Games SA or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
Alior Bank SA vs. Pyramid Games SA
Performance |
| Timeline |
| Alior Bank SA |
| Pyramid Games SA |
Alior Bank and Pyramid Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Pyramid Games
The main advantage of trading using opposite Alior Bank and Pyramid Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Pyramid Games 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 Pyramid Games will offset losses from the drop in Pyramid Games' long position.| Alior Bank vs. PZ Cormay SA | Alior Bank vs. GreenX Metals | Alior Bank vs. LSI Software SA | Alior Bank vs. PLAYWAY 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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