Correlation Between Alphabet and SKAN Group
Can any of the company-specific risk be diversified away by investing in both Alphabet and SKAN Group 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 Alphabet and SKAN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and SKAN Group AG, you can compare the effects of market volatilities on Alphabet and SKAN Group 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 Alphabet with a short position of SKAN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and SKAN Group.
Diversification Opportunities for Alphabet and SKAN Group
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alphabet and SKAN is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and SKAN Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAN Group AG and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with SKAN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAN Group AG has no effect on the direction of Alphabet i.e., Alphabet and SKAN Group go up and down completely randomly.
Pair Corralation between Alphabet and SKAN Group
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 1.07 times more return on investment than SKAN Group. However, Alphabet is 1.07 times more volatile than SKAN Group AG. It trades about 0.06 of its potential returns per unit of risk. SKAN Group AG is currently generating about 0.0 per unit of risk. If you would invest 12,237 in Alphabet Inc Class C on August 31, 2024 and sell it today you would earn a total of 4,812 from holding Alphabet Inc Class C or generate 39.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Alphabet Inc Class C vs. SKAN Group AG
Performance |
| Timeline |
| Alphabet Class C |
| SKAN Group AG |
Alphabet and SKAN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and SKAN Group
The main advantage of trading using opposite Alphabet and SKAN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, SKAN Group 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 SKAN Group will offset losses from the drop in SKAN Group's long position.The idea behind Alphabet Inc Class C and SKAN Group AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SKAN Group vs. Bachem Holding AG | SKAN Group vs. PolyPeptide Group AG | SKAN Group vs. VAT Group AG | SKAN Group vs. Belimo Holding |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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