Correlation Between ALIOR BANK and OAKTRSPECLENDNEW

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

By analyzing existing cross correlation between ALIOR BANK and OAKTRSPECLENDNEW, you can compare the effects of market volatilities on ALIOR BANK and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALIOR BANK and OAKTRSPECLENDNEW.

Diversification Opportunities for ALIOR BANK and OAKTRSPECLENDNEW

0.6

Correlation Coefficient

ALIOR BANK  OAKTRSPECLENDNEW

Poor diversification

The 3 months correlation between ALIOR and OAKTRSPECLENDNEW is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ALIOR BANK and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW 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 are associated (or correlated) with OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of ALIOR BANK i.e., ALIOR BANK and OAKTRSPECLENDNEW go up and down completely randomly.

Pair Corralation between ALIOR BANK and OAKTRSPECLENDNEW

Assuming the 90 days trading horizon ALIOR BANK is expected to generate 2.23 times more return on investment than OAKTRSPECLENDNEW. However, ALIOR BANK is 2.23 times more volatile than OAKTRSPECLENDNEW. It trades about 0.14 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about -0.09 per unit of risk. If you would invest  2,202  in ALIOR BANK on December 10, 2024 and sell it today you would earn a total of  156.00  from holding ALIOR BANK or generate 7.08% return on investment over 90 days.

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

ALIOR BANK  vs.  OAKTRSPECLENDNEW

ALIOR BANK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ALIOR BANK are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, ALIOR BANK exhibited solid returns over the last few months and may actually be approaching a breakup point.

OAKTRSPECLENDNEW

Risk-Adjusted Performance

Very Weak

Over the last 90 days OAKTRSPECLENDNEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, OAKTRSPECLENDNEW is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ALIOR BANK and OAKTRSPECLENDNEW

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

The idea behind ALIOR BANK and OAKTRSPECLENDNEW 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.