Correlation Between Alten SA and IT Link
Can any of the company-specific risk be diversified away by investing in both Alten SA and IT Link 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 Alten SA and IT Link into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alten SA and IT Link, you can compare the effects of market volatilities on Alten SA and IT Link 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 Alten SA with a short position of IT Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alten SA and IT Link.
Diversification Opportunities for Alten SA and IT Link
Average diversification
The 3 months correlation between Alten and ALITL is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Alten SA and IT Link in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IT Link and Alten 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 Alten SA are associated (or correlated) with IT Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IT Link has no effect on the direction of Alten SA i.e., Alten SA and IT Link go up and down completely randomly.
Pair Corralation between Alten SA and IT Link
Assuming the 90 days trading horizon Alten SA is expected to under-perform the IT Link. In addition to that, Alten SA is 1.04 times more volatile than IT Link. It trades about -0.11 of its total potential returns per unit of risk. IT Link is currently generating about -0.09 per unit of volatility. If you would invest 2,720 in IT Link on August 26, 2024 and sell it today you would lose (90.00) from holding IT Link or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alten SA vs. IT Link
Performance |
| Timeline |
| Alten SA |
| IT Link |
Alten SA and IT Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alten SA and IT Link
The main advantage of trading using opposite Alten SA and IT Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alten SA position performs unexpectedly, IT Link 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 IT Link will offset losses from the drop in IT Link's long position.| Alten SA vs. Sopra Steria Group | Alten SA vs. Teleperformance SE | Alten SA vs. Capgemini SE | Alten SA vs. Aubay Socit Anonyme |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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