Correlation Between Lendinvest PLC and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Alior Bank 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 Lendinvest PLC and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Alior Bank SA, you can compare the effects of market volatilities on Lendinvest PLC and Alior Bank 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 Lendinvest PLC with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Alior Bank.
Diversification Opportunities for Lendinvest PLC and Alior Bank
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lendinvest and Alior is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and Lendinvest PLC 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 Lendinvest PLC are associated (or correlated) with Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Alior Bank go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Alior Bank
Assuming the 90 days trading horizon Lendinvest PLC is expected to under-perform the Alior Bank. But the stock apears to be less risky and, when comparing its historical volatility, Lendinvest PLC is 2.65 times less risky than Alior Bank. The stock trades about -0.04 of its potential returns per unit of risk. The Alior Bank SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,950 in Alior Bank SA on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Alior Bank SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendinvest PLC vs. Alior Bank SA
Performance |
| Timeline |
| Lendinvest PLC |
| Alior Bank SA |
Lendinvest PLC and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Alior Bank
The main advantage of trading using opposite Lendinvest PLC and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Alior Bank 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 Alior Bank will offset losses from the drop in Alior Bank's long position.| Lendinvest PLC vs. Naturhouse Health SA | Lendinvest PLC vs. Spire Healthcare Group | Lendinvest PLC vs. Scandinavian Tobacco Group | Lendinvest PLC vs. Wyndham Hotels Resorts |
| Alior Bank vs. Check Point Software | Alior Bank vs. Darden Restaurants | Alior Bank vs. Hecla Mining Co | Alior Bank vs. Atalaya Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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