Correlation Between Alior Bank and RAFAKO SA
Can any of the company-specific risk be diversified away by investing in both Alior Bank and RAFAKO SA 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 RAFAKO SA 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 RAFAKO SA, you can compare the effects of market volatilities on Alior Bank and RAFAKO SA 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 RAFAKO SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and RAFAKO SA.
Diversification Opportunities for Alior Bank and RAFAKO SA
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alior and RAFAKO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and RAFAKO SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RAFAKO 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 RAFAKO SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RAFAKO SA has no effect on the direction of Alior Bank i.e., Alior Bank and RAFAKO SA go up and down completely randomly.
Pair Corralation between Alior Bank and RAFAKO SA
Assuming the 90 days trading horizon Alior Bank SA is expected to under-perform the RAFAKO SA. But the stock apears to be less risky and, when comparing its historical volatility, Alior Bank SA is 8.96 times less risky than RAFAKO SA. The stock trades about -0.03 of its potential returns per unit of risk. The RAFAKO SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 34.00 in RAFAKO SA on September 14, 2024 and sell it today you would earn a total of 0.00 from holding RAFAKO SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. RAFAKO SA
Performance |
| Timeline |
| Alior Bank SA |
| RAFAKO SA |
Alior Bank and RAFAKO SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and RAFAKO SA
The main advantage of trading using opposite Alior Bank and RAFAKO SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, RAFAKO SA 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 RAFAKO SA will offset losses from the drop in RAFAKO SA's long position.| Alior Bank vs. Banco Santander SA | Alior Bank vs. Asseco Business Solutions | Alior Bank vs. Asseco South Eastern | Alior Bank vs. HM Inwest SA |
| RAFAKO SA vs. Skyline Investment SA | RAFAKO SA vs. Alior Bank SA | RAFAKO SA vs. MCI Management SA | RAFAKO SA vs. Bank Millennium SA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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