Correlation Between Banco Alfa and Alfa Holdings
Can any of the company-specific risk be diversified away by investing in both Banco Alfa and Alfa Holdings 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 Banco Alfa and Alfa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Alfa de and Alfa Holdings SA, you can compare the effects of market volatilities on Banco Alfa and Alfa Holdings 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 Banco Alfa with a short position of Alfa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Alfa and Alfa Holdings.
Diversification Opportunities for Banco Alfa and Alfa Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Alfa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banco Alfa de and Alfa Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Holdings SA and Banco Alfa 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 Banco Alfa de are associated (or correlated) with Alfa Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Holdings SA has no effect on the direction of Banco Alfa i.e., Banco Alfa and Alfa Holdings go up and down completely randomly.
Pair Corralation between Banco Alfa and Alfa Holdings
If you would invest 726.00 in Alfa Holdings SA on September 1, 2024 and sell it today you would earn a total of 178.00 from holding Alfa Holdings SA or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Alfa de vs. Alfa Holdings SA
Performance |
| Timeline |
| Banco Alfa de |
| Alfa Holdings SA |
Banco Alfa and Alfa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Alfa and Alfa Holdings
The main advantage of trading using opposite Banco Alfa and Alfa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Alfa position performs unexpectedly, Alfa Holdings 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 Alfa Holdings will offset losses from the drop in Alfa Holdings' long position.| Banco Alfa vs. Banco Alfa de | Banco Alfa vs. Banestes SA | Banco Alfa vs. Banco Mercantil do | Banco Alfa vs. Banco da Amaznia |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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