Correlation Between Altareit and Theradiag

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Can any of the company-specific risk be diversified away by investing in both Altareit and Theradiag 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 Altareit and Theradiag into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altareit and Theradiag SA, you can compare the effects of market volatilities on Altareit and Theradiag 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 Altareit with a short position of Theradiag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altareit and Theradiag.

Diversification Opportunities for Altareit and Theradiag

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Altareit and Theradiag is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Altareit and Theradiag SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theradiag SA and Altareit 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 Altareit are associated (or correlated) with Theradiag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theradiag SA has no effect on the direction of Altareit i.e., Altareit and Theradiag go up and down completely randomly.

Pair Corralation between Altareit and Theradiag

Assuming the 90 days trading horizon Altareit is expected to generate 0.04 times more return on investment than Theradiag. However, Altareit is 23.04 times less risky than Theradiag. It trades about 0.22 of its potential returns per unit of risk. Theradiag SA is currently generating about -0.09 per unit of risk. If you would invest  47,000  in Altareit on November 1, 2024 and sell it today you would earn a total of  800.00  from holding Altareit or generate 1.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Altareit  vs.  Theradiag SA

 Performance 
       Timeline  
Altareit 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Altareit are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Altareit is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
Theradiag SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Theradiag SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Altareit and Theradiag Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altareit and Theradiag

The main advantage of trading using opposite Altareit and Theradiag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altareit position performs unexpectedly, Theradiag 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 Theradiag will offset losses from the drop in Theradiag's long position.
The idea behind Altareit and Theradiag SA 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.
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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