Correlation Between ALIOR BANK and PG E

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

By analyzing existing cross correlation between ALIOR BANK and PG E P6, you can compare the effects of market volatilities on ALIOR BANK and PG E 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 PG E. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALIOR BANK and PG E.

Diversification Opportunities for ALIOR BANK and PG E

-0.35

Correlation Coefficient

ALIOR BANK  PG E

Very good diversification

The 3 months correlation between ALIOR and PCG6 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ALIOR BANK and PG E P6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PG E P6 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 PG E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PG E P6 has no effect on the direction of ALIOR BANK i.e., ALIOR BANK and PG E go up and down completely randomly.

Pair Corralation between ALIOR BANK and PG E

Assuming the 90 days trading horizon ALIOR BANK is expected to under-perform the PG E. In addition to that, ALIOR BANK is 2.11 times more volatile than PG E P6. It trades about -0.02 of its total potential returns per unit of risk. PG E P6 is currently generating about 0.08 per unit of volatility. If you would invest  2,064  in PG E P6 on September 22, 2024 and sell it today you would earn a total of  116.00  from holding PG E P6 or generate 5.62% return on investment over 90 days.

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

ALIOR BANK  vs.  PG E P6

ALIOR BANK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALIOR BANK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ALIOR BANK is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

PG E P6

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PG E P6 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, PG E 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 PG E

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

The idea behind ALIOR BANK and PG E P6 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.