Correlation Between Biztech Konsulting and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Biztech Konsulting and Alior Bank 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 Biztech Konsulting and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biztech Konsulting SA and Alior Bank SA, you can compare the effects of market volatilities on Biztech Konsulting and Alior Bank 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 Biztech Konsulting with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biztech Konsulting and Alior Bank.
Diversification Opportunities for Biztech Konsulting and Alior Bank
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biztech and Alior is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Biztech Konsulting SA and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and Biztech Konsulting 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 Biztech Konsulting SA are associated (or correlated) with Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of Biztech Konsulting i.e., Biztech Konsulting and Alior Bank go up and down completely randomly.
Pair Corralation between Biztech Konsulting and Alior Bank
Assuming the 90 days trading horizon Biztech Konsulting SA is expected to generate 2.9 times more return on investment than Alior Bank. However, Biztech Konsulting is 2.9 times more volatile than Alior Bank SA. It trades about 0.26 of its potential returns per unit of risk. Alior Bank SA is currently generating about -0.14 per unit of risk. If you would invest 14.00 in Biztech Konsulting SA on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Biztech Konsulting SA or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Biztech Konsulting SA vs. Alior Bank SA
Performance |
| Timeline |
| Biztech Konsulting |
| Alior Bank SA |
Biztech Konsulting and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biztech Konsulting and Alior Bank
The main advantage of trading using opposite Biztech Konsulting and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biztech Konsulting position performs unexpectedly, Alior Bank 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 Alior Bank will offset losses from the drop in Alior Bank's long position.| Biztech Konsulting vs. Clean Carbon Energy | Biztech Konsulting vs. ADX | Biztech Konsulting vs. Agroliga Group PLC | Biztech Konsulting vs. Vee SA |
| Alior Bank vs. Banco Santander SA | Alior Bank vs. Asseco Business Solutions | Alior Bank vs. Detalion Games SA | Alior Bank vs. Asseco South Eastern |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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