Correlation Between Financeira Alfa and Alfa Holdings
Can any of the company-specific risk be diversified away by investing in both Financeira 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 Financeira 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 Financeira Alfa SA and Alfa Holdings SA, you can compare the effects of market volatilities on Financeira 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 Financeira Alfa with a short position of Alfa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financeira Alfa and Alfa Holdings.
Diversification Opportunities for Financeira Alfa and Alfa Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Financeira and Alfa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Financeira Alfa SA 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 Financeira 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 Financeira Alfa SA 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 Financeira Alfa i.e., Financeira Alfa and Alfa Holdings go up and down completely randomly.
Pair Corralation between Financeira Alfa and Alfa Holdings
If you would invest 830.00 in Alfa Holdings SA on September 3, 2024 and sell it today you would earn a total of 74.00 from holding Alfa Holdings SA or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financeira Alfa SA vs. Alfa Holdings SA
Performance |
| Timeline |
| Financeira Alfa SA |
| Alfa Holdings SA |
Financeira Alfa and Alfa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financeira Alfa and Alfa Holdings
The main advantage of trading using opposite Financeira Alfa and Alfa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financeira 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.| Financeira Alfa vs. Banco Alfa de | Financeira Alfa vs. Financeira Alfa SA | Financeira Alfa vs. Banco Alfa de | Financeira Alfa vs. Banestes SA |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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