Correlation Between Mlk Foods and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Mlk Foods 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 Mlk Foods and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mlk Foods Public and Alior Bank SA, you can compare the effects of market volatilities on Mlk Foods 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 Mlk Foods with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mlk Foods and Alior Bank.
Diversification Opportunities for Mlk Foods and Alior Bank
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mlk and Alior is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mlk Foods Public 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 Mlk Foods 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 Mlk Foods Public 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 Mlk Foods i.e., Mlk Foods and Alior Bank go up and down completely randomly.
Pair Corralation between Mlk Foods and Alior Bank
Assuming the 90 days trading horizon Mlk Foods is expected to generate 1.32 times less return on investment than Alior Bank. In addition to that, Mlk Foods is 1.77 times more volatile than Alior Bank SA. It trades about 0.04 of its total potential returns per unit of risk. Alior Bank SA is currently generating about 0.1 per unit of volatility. If you would invest 3,711 in Alior Bank SA on November 4, 2024 and sell it today you would earn a total of 5,707 from holding Alior Bank SA or generate 153.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mlk Foods Public vs. Alior Bank SA
Performance |
| Timeline |
| Mlk Foods Public |
| Alior Bank SA |
Mlk Foods and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mlk Foods and Alior Bank
The main advantage of trading using opposite Mlk Foods and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mlk Foods 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.| Mlk Foods vs. Santander Bank Polska | Mlk Foods vs. Asseco South Eastern | Mlk Foods vs. Vercom SA | Mlk Foods vs. CFI Holding SA |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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