Correlation Between Argan SA and Altamir SCA
Can any of the company-specific risk be diversified away by investing in both Argan SA and Altamir SCA 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 Argan SA and Altamir SCA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argan SA and Altamir SCA, you can compare the effects of market volatilities on Argan SA and Altamir SCA 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 Argan SA with a short position of Altamir SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argan SA and Altamir SCA.
Diversification Opportunities for Argan SA and Altamir SCA
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Argan and Altamir is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Argan SA and Altamir SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altamir SCA and Argan SA 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 Argan SA are associated (or correlated) with Altamir SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altamir SCA has no effect on the direction of Argan SA i.e., Argan SA and Altamir SCA go up and down completely randomly.
Pair Corralation between Argan SA and Altamir SCA
Assuming the 90 days trading horizon Argan SA is expected to under-perform the Altamir SCA. But the stock apears to be less risky and, when comparing its historical volatility, Argan SA is 1.64 times less risky than Altamir SCA. The stock trades about -0.18 of its potential returns per unit of risk. The Altamir SCA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,300 in Altamir SCA on August 28, 2024 and sell it today you would lose (50.00) from holding Altamir SCA or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argan SA vs. Altamir SCA
Performance |
| Timeline |
| Argan SA |
| Altamir SCA |
Argan SA and Altamir SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argan SA and Altamir SCA
The main advantage of trading using opposite Argan SA and Altamir SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argan SA position performs unexpectedly, Altamir SCA 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 Altamir SCA will offset losses from the drop in Altamir SCA's long position.| Argan SA vs. Fonciere Lyonnaise | Argan SA vs. Fonciere Inea | Argan SA vs. Societe de la | Argan SA vs. Icade 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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