Correlation Between Frey SA and Altareit
Can any of the company-specific risk be diversified away by investing in both Frey SA and Altareit 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 Frey SA and Altareit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frey SA and Altareit, you can compare the effects of market volatilities on Frey SA and Altareit 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 Frey SA with a short position of Altareit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frey SA and Altareit.
Diversification Opportunities for Frey SA and Altareit
Excellent diversification
The 3 months correlation between Frey and Altareit is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Frey SA and Altareit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altareit and Frey SA 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 Frey SA are associated (or correlated) with Altareit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altareit has no effect on the direction of Frey SA i.e., Frey SA and Altareit go up and down completely randomly.
Pair Corralation between Frey SA and Altareit
Assuming the 90 days trading horizon Frey SA is expected to generate 1.13 times more return on investment than Altareit. However, Frey SA is 1.13 times more volatile than Altareit. It trades about -0.01 of its potential returns per unit of risk. Altareit is currently generating about -0.05 per unit of risk. If you would invest 3,074 in Frey SA on November 19, 2024 and sell it today you would lose (274.00) from holding Frey SA or give up 8.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frey SA vs. Altareit
Performance |
| Timeline |
| Frey SA |
| Altareit |
Frey SA and Altareit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frey SA and Altareit
The main advantage of trading using opposite Frey SA and Altareit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frey SA position performs unexpectedly, Altareit 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 Altareit will offset losses from the drop in Altareit's long position.| Frey SA vs. Fonciere Inea | Frey SA vs. Fonciere Lyonnaise | Frey SA vs. Immobiliere Dassault SA | Frey SA vs. Argan SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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