Correlation Between Alten SA and Assystem
Can any of the company-specific risk be diversified away by investing in both Alten SA and Assystem 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 Assystem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alten SA and Assystem SA, you can compare the effects of market volatilities on Alten SA and Assystem 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 Assystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alten SA and Assystem.
Diversification Opportunities for Alten SA and Assystem
Very poor diversification
The 3 months correlation between Alten and Assystem is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Alten SA and Assystem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assystem SA 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 Assystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assystem SA has no effect on the direction of Alten SA i.e., Alten SA and Assystem go up and down completely randomly.
Pair Corralation between Alten SA and Assystem
Assuming the 90 days trading horizon Alten SA is expected to under-perform the Assystem. But the stock apears to be less risky and, when comparing its historical volatility, Alten SA is 1.27 times less risky than Assystem. The stock trades about -0.16 of its potential returns per unit of risk. The Assystem SA is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 5,649 in Assystem SA on August 26, 2024 and sell it today you would lose (2,089) from holding Assystem SA or give up 36.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alten SA vs. Assystem SA
Performance |
| Timeline |
| Alten SA |
| Assystem SA |
Alten SA and Assystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alten SA and Assystem
The main advantage of trading using opposite Alten SA and Assystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alten SA position performs unexpectedly, Assystem 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 Assystem will offset losses from the drop in Assystem'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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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