Correlation Between Alpha Trust and Selected Textiles
Can any of the company-specific risk be diversified away by investing in both Alpha Trust and Selected Textiles 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 Alpha Trust and Selected Textiles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Trust Mutual and Selected Textiles SA, you can compare the effects of market volatilities on Alpha Trust and Selected Textiles 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 Alpha Trust with a short position of Selected Textiles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Trust and Selected Textiles.
Diversification Opportunities for Alpha Trust and Selected Textiles
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alpha and Selected is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Trust Mutual and Selected Textiles SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selected Textiles and Alpha Trust 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 Alpha Trust Mutual are associated (or correlated) with Selected Textiles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selected Textiles has no effect on the direction of Alpha Trust i.e., Alpha Trust and Selected Textiles go up and down completely randomly.
Pair Corralation between Alpha Trust and Selected Textiles
Assuming the 90 days trading horizon Alpha Trust Mutual is expected to generate 0.23 times more return on investment than Selected Textiles. However, Alpha Trust Mutual is 4.43 times less risky than Selected Textiles. It trades about 0.15 of its potential returns per unit of risk. Selected Textiles SA is currently generating about 0.02 per unit of risk. If you would invest 442.00 in Alpha Trust Mutual on August 27, 2024 and sell it today you would earn a total of 432.00 from holding Alpha Trust Mutual or generate 97.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.64% |
| Values | Daily Returns |
Alpha Trust Mutual vs. Selected Textiles SA
Performance |
| Timeline |
| Alpha Trust Mutual |
| Selected Textiles |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Alpha Trust and Selected Textiles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Trust and Selected Textiles
The main advantage of trading using opposite Alpha Trust and Selected Textiles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Trust position performs unexpectedly, Selected Textiles 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 Selected Textiles will offset losses from the drop in Selected Textiles' long position.| Alpha Trust vs. Jumbo SA | Alpha Trust vs. Gr Sarantis SA | Alpha Trust vs. Hellenic Exchanges | Alpha Trust vs. Aegean Airlines 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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