Correlation Between Alior Bank and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both Alior Bank and AcadeMedia 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 Alior Bank and AcadeMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alior Bank SA and AcadeMedia AB, you can compare the effects of market volatilities on Alior Bank and AcadeMedia 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 Alior Bank with a short position of AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and AcadeMedia.
Diversification Opportunities for Alior Bank and AcadeMedia
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alior and AcadeMedia is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB and Alior Bank 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 Alior Bank SA are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Alior Bank i.e., Alior Bank and AcadeMedia go up and down completely randomly.
Pair Corralation between Alior Bank and AcadeMedia
Assuming the 90 days trading horizon Alior Bank SA is expected to generate 1.97 times more return on investment than AcadeMedia. However, Alior Bank is 1.97 times more volatile than AcadeMedia AB. It trades about 0.01 of its potential returns per unit of risk. AcadeMedia AB is currently generating about -0.09 per unit of risk. If you would invest 7,950 in Alior Bank SA on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Alior Bank SA or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Alior Bank SA vs. AcadeMedia AB
Performance |
Timeline |
Alior Bank SA |
AcadeMedia AB |
Alior Bank and AcadeMedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alior Bank and AcadeMedia
The main advantage of trading using opposite Alior Bank and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.Alior Bank vs. Toyota Motor Corp | Alior Bank vs. SoftBank Group Corp | Alior Bank vs. OTP Bank Nyrt | Alior Bank vs. Las Vegas Sands |
AcadeMedia vs. Samsung Electronics Co | AcadeMedia vs. Samsung Electronics Co | AcadeMedia vs. Hyundai Motor | AcadeMedia vs. Toyota Motor Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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