Correlation Between Alliance Financial and Nexgram Holdings

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

By analyzing existing cross correlation between Alliance Financial Group and Nexgram Holdings Bhd, you can compare the effects of market volatilities on Alliance Financial and Nexgram Holdings 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 Alliance Financial with a short position of Nexgram Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Financial and Nexgram Holdings.

Diversification Opportunities for Alliance Financial and Nexgram Holdings

0.0

Correlation Coefficient

Alliance Financial  Nexgram Holdings

Pay attention - limited upside

The 3 months correlation between Alliance and Nexgram is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Financial Group and Nexgram Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexgram Holdings Bhd and Alliance Financial 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 Alliance Financial Group are associated (or correlated) with Nexgram Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexgram Holdings Bhd has no effect on the direction of Alliance Financial i.e., Alliance Financial and Nexgram Holdings go up and down completely randomly.

Pair Corralation between Alliance Financial and Nexgram Holdings

If you would invest  483.00  in Alliance Financial Group on October 25, 2024 and sell it today you would earn a total of  41.00  from holding Alliance Financial Group or generate 8.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alliance Financial Group  vs.  Nexgram Holdings Bhd

Alliance Financial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alliance Financial Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Alliance Financial disclosed solid returns over the last few months and may actually be approaching a breakup point.

Nexgram Holdings Bhd

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Nexgram Holdings Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Nexgram Holdings is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Alliance Financial and Nexgram Holdings

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

The idea behind Alliance Financial Group and Nexgram Holdings Bhd 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 Transaction History module to view history of all your transactions and understand their impact on performance.