Correlation Between Memscap Regpt and Alten SA
Can any of the company-specific risk be diversified away by investing in both Memscap Regpt and Alten SA 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 Memscap Regpt and Alten SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Memscap Regpt and Alten SA, you can compare the effects of market volatilities on Memscap Regpt and Alten SA 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 Memscap Regpt with a short position of Alten SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Memscap Regpt and Alten SA.
Diversification Opportunities for Memscap Regpt and Alten SA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Memscap and Alten is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Memscap Regpt and Alten SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alten SA and Memscap Regpt 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 Memscap Regpt are associated (or correlated) with Alten SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alten SA has no effect on the direction of Memscap Regpt i.e., Memscap Regpt and Alten SA go up and down completely randomly.
Pair Corralation between Memscap Regpt and Alten SA
Assuming the 90 days trading horizon Memscap Regpt is expected to under-perform the Alten SA. In addition to that, Memscap Regpt is 1.52 times more volatile than Alten SA. It trades about -0.22 of its total potential returns per unit of risk. Alten SA is currently generating about -0.26 per unit of volatility. If you would invest 8,870 in Alten SA on August 24, 2024 and sell it today you would lose (1,100) from holding Alten SA or give up 12.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Memscap Regpt vs. Alten SA
Performance |
| Timeline |
| Memscap Regpt |
| Alten SA |
Memscap Regpt and Alten SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Memscap Regpt and Alten SA
The main advantage of trading using opposite Memscap Regpt and Alten SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Memscap Regpt position performs unexpectedly, Alten SA 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 Alten SA will offset losses from the drop in Alten SA's long position.The idea behind Memscap Regpt and Alten SA 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.| Alten SA vs. Sopra Steria Group | Alten SA vs. Teleperformance SE | Alten SA vs. Capgemini SE | Alten SA vs. Aubay Socit Anonyme |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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