Correlation Between Selected Textiles and Alpha Services
Can any of the company-specific risk be diversified away by investing in both Selected Textiles and Alpha Services 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 Selected Textiles and Alpha Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selected Textiles SA and Alpha Services and, you can compare the effects of market volatilities on Selected Textiles and Alpha Services 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 Selected Textiles with a short position of Alpha Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selected Textiles and Alpha Services.
Diversification Opportunities for Selected Textiles and Alpha Services
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Selected and Alpha is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Selected Textiles SA and Alpha Services and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Services and Selected Textiles 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 Selected Textiles SA are associated (or correlated) with Alpha Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Services has no effect on the direction of Selected Textiles i.e., Selected Textiles and Alpha Services go up and down completely randomly.
Pair Corralation between Selected Textiles and Alpha Services
Assuming the 90 days trading horizon Selected Textiles SA is expected to generate 2.44 times more return on investment than Alpha Services. However, Selected Textiles is 2.44 times more volatile than Alpha Services and. It trades about 0.86 of its potential returns per unit of risk. Alpha Services and is currently generating about 0.17 per unit of risk. If you would invest 11.00 in Selected Textiles SA on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Selected Textiles SA or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 19.05% |
| Values | Daily Returns |
Selected Textiles SA vs. Alpha Services and
Performance |
| Timeline |
| Selected Textiles |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Alpha Services |
Selected Textiles and Alpha Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selected Textiles and Alpha Services
The main advantage of trading using opposite Selected Textiles and Alpha Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selected Textiles position performs unexpectedly, Alpha Services 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 Alpha Services will offset losses from the drop in Alpha Services' long position.| Selected Textiles vs. Technical Olympic SA | Selected Textiles vs. Iktinos Hellas SA | Selected Textiles vs. GEK TERNA Holdings |
| Alpha Services vs. Piraeus Financial Holdings | Alpha Services vs. Eurobank Ergasias Services | Alpha Services vs. National Bank of | Alpha Services vs. Greek Organization of |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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