Correlation Between Exail Technologies and ALD SA
Can any of the company-specific risk be diversified away by investing in both Exail Technologies and ALD SA 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 Exail Technologies and ALD SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exail Technologies SA and ALD SA, you can compare the effects of market volatilities on Exail Technologies and ALD SA 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 Exail Technologies with a short position of ALD SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exail Technologies and ALD SA.
Diversification Opportunities for Exail Technologies and ALD SA
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exail and ALD is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Exail Technologies SA and ALD SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALD SA and Exail 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 Exail Technologies SA are associated (or correlated) with ALD SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALD SA has no effect on the direction of Exail Technologies i.e., Exail Technologies and ALD SA go up and down completely randomly.
Pair Corralation between Exail Technologies and ALD SA
Assuming the 90 days trading horizon Exail Technologies is expected to generate 1.04 times less return on investment than ALD SA. But when comparing it to its historical volatility, Exail Technologies SA is 1.41 times less risky than ALD SA. It trades about 0.07 of its potential returns per unit of risk. ALD SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 624.00 in ALD SA on October 25, 2024 and sell it today you would earn a total of 78.00 from holding ALD SA or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exail Technologies SA vs. ALD SA
Performance |
| Timeline |
| Exail Technologies |
| ALD SA |
Exail Technologies and ALD SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exail Technologies and ALD SA
The main advantage of trading using opposite Exail Technologies and ALD SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exail Technologies position performs unexpectedly, ALD SA 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 ALD SA will offset losses from the drop in ALD SA's long position.| Exail Technologies vs. Technip Energies BV | Exail Technologies vs. Netmedia Group SA | Exail Technologies vs. Jacquet Metal Service | Exail Technologies vs. Aures Technologies 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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