Correlation Between Cloud Technologies and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Cloud Technologies 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 Cloud Technologies and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloud Technologies SA and Alior Bank SA, you can compare the effects of market volatilities on Cloud Technologies 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 Cloud Technologies with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Technologies and Alior Bank.
Diversification Opportunities for Cloud Technologies and Alior Bank
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cloud and Alior is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Technologies 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 Cloud Technologies 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 Cloud Technologies 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 Cloud Technologies i.e., Cloud Technologies and Alior Bank go up and down completely randomly.
Pair Corralation between Cloud Technologies and Alior Bank
Assuming the 90 days trading horizon Cloud Technologies SA is expected to under-perform the Alior Bank. In addition to that, Cloud Technologies is 1.33 times more volatile than Alior Bank SA. It trades about -0.06 of its total potential returns per unit of risk. Alior Bank SA is currently generating about 0.04 per unit of volatility. If you would invest 7,480 in Alior Bank SA on September 14, 2024 and sell it today you would earn a total of 1,420 from holding Alior Bank SA or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloud Technologies SA vs. Alior Bank SA
Performance |
| Timeline |
| Cloud Technologies |
| Alior Bank SA |
Cloud Technologies and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Technologies and Alior Bank
The main advantage of trading using opposite Cloud Technologies and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Technologies 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.| Cloud Technologies vs. UF Games SA | Cloud Technologies vs. Mlk Foods Public | Cloud Technologies vs. GreenX Metals | Cloud Technologies vs. Drago entertainment SA |
| Alior Bank vs. Banco Santander SA | Alior Bank vs. Asseco Business Solutions | Alior Bank vs. Asseco South Eastern | Alior Bank vs. HM Inwest 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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