Correlation Between Cairn Homes and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Cairn Homes 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 Cairn Homes and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairn Homes PLC and Alior Bank SA, you can compare the effects of market volatilities on Cairn Homes 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 Cairn Homes with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and Alior Bank.
Diversification Opportunities for Cairn Homes and Alior Bank
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cairn and Alior is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC 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 Cairn Homes 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 Cairn Homes PLC 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 Cairn Homes i.e., Cairn Homes and Alior Bank go up and down completely randomly.
Pair Corralation between Cairn Homes and Alior Bank
If you would invest 7,950 in Alior Bank SA on January 15, 2025 and sell it today you would earn a total of 0.00 from holding Alior Bank SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cairn Homes PLC vs. Alior Bank SA
Performance |
| Timeline |
| Cairn Homes PLC |
| Alior Bank SA |
Cairn Homes and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairn Homes and Alior Bank
The main advantage of trading using opposite Cairn Homes and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes 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.| Cairn Homes vs. Walmart | Cairn Homes vs. Volkswagen AG Non Vtg | Cairn Homes vs. Volkswagen AG | Cairn Homes vs. Compass Group PLC |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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