Correlation Between Alten SA and Infotel SA
Can any of the company-specific risk be diversified away by investing in both Alten SA and Infotel SA 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 Infotel SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alten SA and Infotel SA, you can compare the effects of market volatilities on Alten SA and Infotel SA 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 Infotel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alten SA and Infotel SA.
Diversification Opportunities for Alten SA and Infotel SA
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alten and Infotel is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alten SA and Infotel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infotel 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 Infotel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infotel SA has no effect on the direction of Alten SA i.e., Alten SA and Infotel SA go up and down completely randomly.
Pair Corralation between Alten SA and Infotel SA
Assuming the 90 days trading horizon Alten SA is expected to under-perform the Infotel SA. In addition to that, Alten SA is 1.23 times more volatile than Infotel SA. It trades about -0.13 of its total potential returns per unit of risk. Infotel SA is currently generating about -0.04 per unit of volatility. If you would invest 4,977 in Infotel SA on August 28, 2024 and sell it today you would lose (687.00) from holding Infotel SA or give up 13.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alten SA vs. Infotel SA
Performance |
| Timeline |
| Alten SA |
| Infotel SA |
Alten SA and Infotel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alten SA and Infotel SA
The main advantage of trading using opposite Alten SA and Infotel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alten SA position performs unexpectedly, Infotel SA 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 Infotel SA will offset losses from the drop in Infotel SA's long position.| Alten SA vs. Neurones | Alten SA vs. Manitou BF SA | Alten SA vs. Ossiam Minimum Variance | Alten SA vs. Granite 3x LVMH |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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