Correlation Between Carlson Investments and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Carlson Investments 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 Carlson Investments and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlson Investments SA and Alior Bank SA, you can compare the effects of market volatilities on Carlson Investments 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 Carlson Investments with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlson Investments and Alior Bank.
Diversification Opportunities for Carlson Investments and Alior Bank
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlson and Alior is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Carlson Investments 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 Carlson Investments 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 Carlson Investments 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 Carlson Investments i.e., Carlson Investments and Alior Bank go up and down completely randomly.
Pair Corralation between Carlson Investments and Alior Bank
Assuming the 90 days trading horizon Carlson Investments SA is expected to generate 1.94 times more return on investment than Alior Bank. However, Carlson Investments is 1.94 times more volatile than Alior Bank SA. It trades about 0.04 of its potential returns per unit of risk. Alior Bank SA is currently generating about 0.03 per unit of risk. If you would invest 448.00 in Carlson Investments SA on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Carlson Investments SA or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Carlson Investments SA vs. Alior Bank SA
Performance |
| Timeline |
| Carlson Investments |
| Alior Bank SA |
Carlson Investments and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlson Investments and Alior Bank
The main advantage of trading using opposite Carlson Investments and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlson Investments 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.| Carlson Investments vs. Centrum Finansowe Banku | Carlson Investments vs. Asseco Business Solutions | Carlson Investments vs. Detalion Games SA | Carlson Investments vs. Asseco South Eastern |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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