Correlation Between Basic Materials and Alfa Holdings
Can any of the company-specific risk be diversified away by investing in both Basic Materials and Alfa Holdings 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 Basic Materials and Alfa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Materials and Alfa Holdings SA, you can compare the effects of market volatilities on Basic Materials and Alfa Holdings 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 Basic Materials with a short position of Alfa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Materials and Alfa Holdings.
Diversification Opportunities for Basic Materials and Alfa Holdings
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Basic and Alfa is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Basic Materials and Alfa Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Holdings SA and Basic Materials 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 Basic Materials are associated (or correlated) with Alfa Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Holdings SA has no effect on the direction of Basic Materials i.e., Basic Materials and Alfa Holdings go up and down completely randomly.
Pair Corralation between Basic Materials and Alfa Holdings
Assuming the 90 days trading horizon Basic Materials is expected to generate 0.42 times more return on investment than Alfa Holdings. However, Basic Materials is 2.37 times less risky than Alfa Holdings. It trades about 0.03 of its potential returns per unit of risk. Alfa Holdings SA is currently generating about 0.0 per unit of risk. If you would invest 554,106 in Basic Materials on September 1, 2024 and sell it today you would earn a total of 33,304 from holding Basic Materials or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Basic Materials vs. Alfa Holdings SA
Performance |
| Timeline |
Basic Materials and Alfa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Basic Materials
Pair trading matchups for Basic Materials
Alfa Holdings SA
Pair trading matchups for Alfa Holdings
Pair Trading with Basic Materials and Alfa Holdings
The main advantage of trading using opposite Basic Materials and Alfa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Materials position performs unexpectedly, Alfa Holdings 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 Alfa Holdings will offset losses from the drop in Alfa Holdings' long position.| Basic Materials vs. GP Investments | Basic Materials vs. TAL Education Group | Basic Materials vs. Deutsche Bank Aktiengesellschaft | Basic Materials vs. STMicroelectronics NV |
| Alfa Holdings vs. Alfa Holdings SA | Alfa Holdings vs. Alfa Holdings SA | Alfa Holdings vs. Banco Alfa de | Alfa Holdings vs. Banco Alfa de |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |