Correlation Between Altarea SCA and Argan SA
Can any of the company-specific risk be diversified away by investing in both Altarea SCA and Argan 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 Altarea SCA and Argan SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altarea SCA and Argan SA, you can compare the effects of market volatilities on Altarea SCA and Argan 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 Altarea SCA with a short position of Argan SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altarea SCA and Argan SA.
Diversification Opportunities for Altarea SCA and Argan SA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Altarea and Argan is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Altarea SCA and Argan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argan SA and Altarea SCA 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 Altarea SCA are associated (or correlated) with Argan SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argan SA has no effect on the direction of Altarea SCA i.e., Altarea SCA and Argan SA go up and down completely randomly.
Pair Corralation between Altarea SCA and Argan SA
Assuming the 90 days trading horizon Altarea SCA is expected to generate 3.21 times less return on investment than Argan SA. In addition to that, Altarea SCA is 1.36 times more volatile than Argan SA. It trades about 0.04 of its total potential returns per unit of risk. Argan SA is currently generating about 0.18 per unit of volatility. If you would invest 6,040 in Argan SA on November 4, 2024 and sell it today you would earn a total of 320.00 from holding Argan SA or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altarea SCA vs. Argan SA
Performance |
| Timeline |
| Altarea SCA |
| Argan SA |
Altarea SCA and Argan SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altarea SCA and Argan SA
The main advantage of trading using opposite Altarea SCA and Argan SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altarea SCA position performs unexpectedly, Argan 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 Argan SA will offset losses from the drop in Argan SA's long position.| Altarea SCA vs. Icade SA | Altarea SCA vs. Covivio SA | Altarea SCA vs. Mercialys SA | Altarea SCA vs. Gecina 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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