Correlation Between Novavis Group and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Novavis Group 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 Novavis Group and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novavis Group SA and Alior Bank SA, you can compare the effects of market volatilities on Novavis Group 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 Novavis Group with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novavis Group and Alior Bank.
Diversification Opportunities for Novavis Group and Alior Bank
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Novavis and Alior is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Novavis Group 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 Novavis Group 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 Novavis Group 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 Novavis Group i.e., Novavis Group and Alior Bank go up and down completely randomly.
Pair Corralation between Novavis Group and Alior Bank
Assuming the 90 days trading horizon Novavis Group SA is expected to under-perform the Alior Bank. In addition to that, Novavis Group is 1.26 times more volatile than Alior Bank SA. It trades about -0.03 of its total potential returns per unit of risk. Alior Bank SA is currently generating about 0.07 per unit of volatility. If you would invest 5,491 in Alior Bank SA on September 12, 2024 and sell it today you would earn a total of 3,409 from holding Alior Bank SA or generate 62.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novavis Group SA vs. Alior Bank SA
Performance |
| Timeline |
| Novavis Group SA |
| Alior Bank SA |
Novavis Group and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novavis Group and Alior Bank
The main advantage of trading using opposite Novavis Group and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novavis Group 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.| Novavis Group vs. GreenX Metals | Novavis Group vs. Mlk Foods Public | Novavis Group vs. SOFTWARE MANSION SPOLKA | Novavis Group vs. mBank SA |
| Alior Bank vs. Banco Santander SA | Alior Bank vs. Asseco Business Solutions | Alior Bank vs. Detalion Games SA | Alior Bank vs. Asseco South Eastern |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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