Correlation Between Martifer SGPS and Altri SGPS
Can any of the company-specific risk be diversified away by investing in both Martifer SGPS and Altri SGPS 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 Martifer SGPS and Altri SGPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martifer SGPS SA and Altri SGPS SA, you can compare the effects of market volatilities on Martifer SGPS and Altri SGPS 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 Martifer SGPS with a short position of Altri SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martifer SGPS and Altri SGPS.
Diversification Opportunities for Martifer SGPS and Altri SGPS
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Martifer and Altri is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Martifer SGPS SA and Altri SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altri SGPS SA and Martifer SGPS 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 Martifer SGPS SA are associated (or correlated) with Altri SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altri SGPS SA has no effect on the direction of Martifer SGPS i.e., Martifer SGPS and Altri SGPS go up and down completely randomly.
Pair Corralation between Martifer SGPS and Altri SGPS
Assuming the 90 days trading horizon Martifer SGPS SA is expected to generate 1.92 times more return on investment than Altri SGPS. However, Martifer SGPS is 1.92 times more volatile than Altri SGPS SA. It trades about 0.07 of its potential returns per unit of risk. Altri SGPS SA is currently generating about 0.03 per unit of risk. If you would invest 124.00 in Martifer SGPS SA on August 29, 2024 and sell it today you would earn a total of 49.00 from holding Martifer SGPS SA or generate 39.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martifer SGPS SA vs. Altri SGPS SA
Performance |
| Timeline |
| Martifer SGPS SA |
| Altri SGPS SA |
Martifer SGPS and Altri SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martifer SGPS and Altri SGPS
The main advantage of trading using opposite Martifer SGPS and Altri SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martifer SGPS position performs unexpectedly, Altri SGPS 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 Altri SGPS will offset losses from the drop in Altri SGPS's long position.| Martifer SGPS vs. Mota Engil SGPS SA | Martifer SGPS vs. Impresa Sociedade | Martifer SGPS vs. Teixeira Duarte | Martifer SGPS vs. Altri SGPS SA |
| Altri SGPS vs. The Navigator | Altri SGPS vs. Sonae SGPS SA | Altri SGPS vs. NOS SGPS SA | Altri SGPS vs. Galp Energia SGPS |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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