Correlation Between Altri SGPS and Sonae SGPS
Can any of the company-specific risk be diversified away by investing in both Altri SGPS and Sonae SGPS 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 Sonae SGPS 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 Sonae SGPS SA, you can compare the effects of market volatilities on Altri SGPS and Sonae SGPS 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 Sonae SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altri SGPS and Sonae SGPS.
Diversification Opportunities for Altri SGPS and Sonae SGPS
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Altri and Sonae is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Altri SGPS SA and Sonae SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonae SGPS SA 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 Sonae SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonae SGPS SA has no effect on the direction of Altri SGPS i.e., Altri SGPS and Sonae SGPS go up and down completely randomly.
Pair Corralation between Altri SGPS and Sonae SGPS
Assuming the 90 days trading horizon Altri SGPS SA is expected to under-perform the Sonae SGPS. In addition to that, Altri SGPS is 1.31 times more volatile than Sonae SGPS SA. It trades about -0.04 of its total potential returns per unit of risk. Sonae SGPS SA is currently generating about 0.05 per unit of volatility. If you would invest 92.00 in Sonae SGPS SA on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Sonae SGPS SA or generate 1.09% 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. Sonae SGPS SA
Performance |
| Timeline |
| Altri SGPS SA |
| Sonae SGPS SA |
Altri SGPS and Sonae SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altri SGPS and Sonae SGPS
The main advantage of trading using opposite Altri SGPS and Sonae SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altri SGPS position performs unexpectedly, Sonae SGPS 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 Sonae SGPS will offset losses from the drop in Sonae SGPS'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 |
| Sonae SGPS vs. Banco Comercial Portugues | Sonae SGPS vs. NOS SGPS SA | Sonae SGPS vs. The Navigator | Sonae SGPS vs. Altri 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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