Correlation Between Altarea SCA and Mercialys
Can any of the company-specific risk be diversified away by investing in both Altarea SCA and Mercialys 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 Mercialys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altarea SCA and Mercialys SA, you can compare the effects of market volatilities on Altarea SCA and Mercialys 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 Mercialys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altarea SCA and Mercialys.
Diversification Opportunities for Altarea SCA and Mercialys
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altarea and Mercialys is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Altarea SCA and Mercialys SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercialys 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 Mercialys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercialys SA has no effect on the direction of Altarea SCA i.e., Altarea SCA and Mercialys go up and down completely randomly.
Pair Corralation between Altarea SCA and Mercialys
Assuming the 90 days trading horizon Altarea SCA is expected to generate 1.55 times more return on investment than Mercialys. However, Altarea SCA is 1.55 times more volatile than Mercialys SA. It trades about 0.09 of its potential returns per unit of risk. Mercialys SA is currently generating about 0.1 per unit of risk. If you would invest 6,599 in Altarea SCA on August 24, 2024 and sell it today you would earn a total of 3,161 from holding Altarea SCA or generate 47.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Altarea SCA vs. Mercialys SA
Performance |
| Timeline |
| Altarea SCA |
| Mercialys SA |
Altarea SCA and Mercialys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altarea SCA and Mercialys
The main advantage of trading using opposite Altarea SCA and Mercialys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altarea SCA position performs unexpectedly, Mercialys 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 Mercialys will offset losses from the drop in Mercialys' 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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