Correlation Between Coor Service and Alfa Financial

Can any of the company-specific risk be diversified away by investing in both Coor Service and Alfa Financial 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 Coor Service and Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coor Service Management and Alfa Financial Software, you can compare the effects of market volatilities on Coor Service and Alfa Financial 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 Coor Service with a short position of Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coor Service and Alfa Financial.

Diversification Opportunities for Coor Service and Alfa Financial

-0.25

Correlation Coefficient

Coor Service  Alfa Financial

Very good diversification

The 3 months correlation between Coor and Alfa is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Coor Service Management and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software and Coor Service 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 Coor Service Management are associated (or correlated) with Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Coor Service i.e., Coor Service and Alfa Financial go up and down completely randomly.

Pair Corralation between Coor Service and Alfa Financial

Assuming the 90 days trading horizon Coor Service Management is expected to under-perform the Alfa Financial. In addition to that, Coor Service is 1.26 times more volatile than Alfa Financial Software. It trades about -0.13 of its total potential returns per unit of risk. Alfa Financial Software is currently generating about -0.04 per unit of volatility. If you would invest  21,350  in Alfa Financial Software on October 24, 2024 and sell it today you would lose (1,250) from holding Alfa Financial Software or give up 5.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Coor Service Management  vs.  Alfa Financial Software

Coor Service Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coor Service Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alfa Financial Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alfa Financial Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Alfa Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Coor Service and Alfa Financial

The main advantage of trading using opposite Coor Service and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coor Service position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.

The idea behind Coor Service Management and Alfa Financial Software pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.