Correlation Between Movie Games and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Movie Games 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 Movie Games and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Movie Games SA and Alior Bank SA, you can compare the effects of market volatilities on Movie Games 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 Movie Games with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movie Games and Alior Bank.
Diversification Opportunities for Movie Games and Alior Bank
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Movie and Alior is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games SA 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 Movie Games 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 Movie Games SA 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 Movie Games i.e., Movie Games and Alior Bank go up and down completely randomly.
Pair Corralation between Movie Games and Alior Bank
Assuming the 90 days trading horizon Movie Games SA is expected to under-perform the Alior Bank. But the stock apears to be less risky and, when comparing its historical volatility, Movie Games SA is 1.73 times less risky than Alior Bank. The stock trades about -0.09 of its potential returns per unit of risk. The Alior Bank SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,632 in Alior Bank SA on January 10, 2025 and sell it today you would earn a total of 258.00 from holding Alior Bank SA or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Movie Games SA vs. Alior Bank SA
Performance |
| Timeline |
| Movie Games SA |
| Alior Bank SA |
Movie Games and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Movie Games and Alior Bank
The main advantage of trading using opposite Movie Games and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Movie Games 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.| Movie Games vs. SOFTWARE MANSION SPOLKA | Movie Games vs. Santander Bank Polska | Movie Games vs. Intersport Polska SA | Movie Games vs. Centrum Finansowe Banku |
| Alior Bank vs. Skyline Investment SA | Alior Bank vs. mBank SA | Alior Bank vs. Echo Investment SA | Alior Bank vs. MW Trade SA |
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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