Correlation Between Alliance Select and Emperador
Can any of the company-specific risk be diversified away by investing in both Alliance Select and Emperador 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 Alliance Select and Emperador into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Select Foods and Emperador, you can compare the effects of market volatilities on Alliance Select and Emperador 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 Alliance Select with a short position of Emperador. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Select and Emperador.
Diversification Opportunities for Alliance Select and Emperador
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alliance and Emperador is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Select Foods and Emperador in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emperador and Alliance Select 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 Alliance Select Foods are associated (or correlated) with Emperador. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emperador has no effect on the direction of Alliance Select i.e., Alliance Select and Emperador go up and down completely randomly.
Pair Corralation between Alliance Select and Emperador
Assuming the 90 days trading horizon Alliance Select Foods is expected to under-perform the Emperador. In addition to that, Alliance Select is 8.8 times more volatile than Emperador. It trades about -0.21 of its total potential returns per unit of risk. Emperador is currently generating about -0.08 per unit of volatility. If you would invest 1,810 in Emperador on September 14, 2024 and sell it today you would lose (10.00) from holding Emperador or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 60.87% |
| Values | Daily Returns |
Alliance Select Foods vs. Emperador
Performance |
| Timeline |
| Alliance Select Foods |
| Emperador |
Alliance Select and Emperador Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Select and Emperador
The main advantage of trading using opposite Alliance Select and Emperador positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Select position performs unexpectedly, Emperador 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 Emperador will offset losses from the drop in Emperador's long position.| Alliance Select vs. Atlas Consolidated Mining | Alliance Select vs. Rizal Commercial Banking | Alliance Select vs. Security Bank Corp | Alliance Select vs. Top Frontier Investment |
| Emperador vs. Semirara Mining Corp | Emperador vs. Alliance Select Foods | Emperador vs. Atlas Consolidated Mining | Emperador vs. Philex Mining Corp |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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