Correlation Between ALTEO Energiaszolgalta and OPUS GLOBAL
Can any of the company-specific risk be diversified away by investing in both ALTEO Energiaszolgalta and OPUS GLOBAL 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 ALTEO Energiaszolgalta and OPUS GLOBAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALTEO Energiaszolgaltato Nyrt and OPUS GLOBAL Nyrt, you can compare the effects of market volatilities on ALTEO Energiaszolgalta and OPUS GLOBAL 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 ALTEO Energiaszolgalta with a short position of OPUS GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALTEO Energiaszolgalta and OPUS GLOBAL.
Diversification Opportunities for ALTEO Energiaszolgalta and OPUS GLOBAL
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ALTEO and OPUS is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding ALTEO Energiaszolgaltato Nyrt and OPUS GLOBAL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPUS GLOBAL Nyrt and ALTEO Energiaszolgalta 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 ALTEO Energiaszolgaltato Nyrt are associated (or correlated) with OPUS GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPUS GLOBAL Nyrt has no effect on the direction of ALTEO Energiaszolgalta i.e., ALTEO Energiaszolgalta and OPUS GLOBAL go up and down completely randomly.
Pair Corralation between ALTEO Energiaszolgalta and OPUS GLOBAL
Assuming the 90 days trading horizon ALTEO Energiaszolgaltato Nyrt is expected to generate 1.25 times more return on investment than OPUS GLOBAL. However, ALTEO Energiaszolgalta is 1.25 times more volatile than OPUS GLOBAL Nyrt. It trades about -0.07 of its potential returns per unit of risk. OPUS GLOBAL Nyrt is currently generating about -0.11 per unit of risk. If you would invest 432,000 in ALTEO Energiaszolgaltato Nyrt on August 26, 2024 and sell it today you would lose (6,000) from holding ALTEO Energiaszolgaltato Nyrt or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALTEO Energiaszolgaltato Nyrt vs. OPUS GLOBAL Nyrt
Performance |
| Timeline |
| ALTEO Energiaszolgalta |
| OPUS GLOBAL Nyrt |
ALTEO Energiaszolgalta and OPUS GLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALTEO Energiaszolgalta and OPUS GLOBAL
The main advantage of trading using opposite ALTEO Energiaszolgalta and OPUS GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALTEO Energiaszolgalta position performs unexpectedly, OPUS GLOBAL 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 OPUS GLOBAL will offset losses from the drop in OPUS GLOBAL's long position.The idea behind ALTEO Energiaszolgaltato Nyrt and OPUS GLOBAL Nyrt pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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