Correlation Between Wavestone and Alten SA
Can any of the company-specific risk be diversified away by investing in both Wavestone 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 Wavestone and Alten SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wavestone SA and Alten SA, you can compare the effects of market volatilities on Wavestone 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 Wavestone with a short position of Alten SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wavestone and Alten SA.
Diversification Opportunities for Wavestone and Alten SA
Poor diversification
The 3 months correlation between Wavestone and Alten is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Wavestone SA and Alten SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alten SA and Wavestone 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 Wavestone SA 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 Wavestone i.e., Wavestone and Alten SA go up and down completely randomly.
Pair Corralation between Wavestone and Alten SA
Assuming the 90 days trading horizon Wavestone SA is expected to under-perform the Alten SA. In addition to that, Wavestone is 1.28 times more volatile than Alten SA. It trades about -0.29 of its total potential returns per unit of risk. Alten SA is currently generating about -0.05 per unit of volatility. If you would invest 8,135 in Alten SA on August 28, 2024 and sell it today you would lose (155.00) from holding Alten SA or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wavestone SA vs. Alten SA
Performance |
| Timeline |
| Wavestone SA |
| Alten SA |
Wavestone and Alten SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wavestone and Alten SA
The main advantage of trading using opposite Wavestone and Alten SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wavestone 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.| Wavestone vs. Sartorius Stedim Biotech | Wavestone vs. Lectra SA | Wavestone vs. Teleperformance SE | Wavestone vs. Trigano SA |
| Alten SA vs. Neurones | Alten SA vs. Manitou BF SA | Alten SA vs. Ossiam Minimum Variance | Alten SA vs. Granite 3x LVMH |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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