Correlation Between Altri SGPS and Galp Energia
Can any of the company-specific risk be diversified away by investing in both Altri SGPS and Galp Energia 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 Altri SGPS and Galp Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altri SGPS SA and Galp Energia SGPS, you can compare the effects of market volatilities on Altri SGPS and Galp Energia 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 Altri SGPS with a short position of Galp Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altri SGPS and Galp Energia.
Diversification Opportunities for Altri SGPS and Galp Energia
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Altri and Galp is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Altri SGPS SA and Galp Energia SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galp Energia SGPS and Altri SGPS 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 Altri SGPS SA are associated (or correlated) with Galp Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galp Energia SGPS has no effect on the direction of Altri SGPS i.e., Altri SGPS and Galp Energia go up and down completely randomly.
Pair Corralation between Altri SGPS and Galp Energia
Assuming the 90 days trading horizon Altri SGPS SA is expected to generate 1.06 times more return on investment than Galp Energia. However, Altri SGPS is 1.06 times more volatile than Galp Energia SGPS. It trades about 0.01 of its potential returns per unit of risk. Galp Energia SGPS is currently generating about -0.12 per unit of risk. If you would invest 497.00 in Altri SGPS SA on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Altri SGPS SA or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altri SGPS SA vs. Galp Energia SGPS
Performance |
| Timeline |
| Altri SGPS SA |
| Galp Energia SGPS |
Altri SGPS and Galp Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altri SGPS and Galp Energia
The main advantage of trading using opposite Altri SGPS and Galp Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altri SGPS position performs unexpectedly, Galp Energia 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 Galp Energia will offset losses from the drop in Galp Energia's long position.| Altri SGPS vs. The Navigator | Altri SGPS vs. Sonae SGPS SA | Altri SGPS vs. NOS SGPS SA | Altri SGPS vs. Galp Energia SGPS |
| Galp Energia vs. EDP Energias | Galp Energia vs. Sonae SGPS SA | Galp Energia vs. Banco Comercial Portugues | Galp Energia vs. NOS SGPS 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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