Correlation Between Alta SA and Altustfi

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

By analyzing existing cross correlation between Alta SA and Altustfi, you can compare the effects of market volatilities on Alta SA and Altustfi 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 Alta SA with a short position of Altustfi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta SA and Altustfi.

Diversification Opportunities for Alta SA and Altustfi

0.15

Correlation Coefficient

Alta SA  Altustfi

Average diversification

The 3 months correlation between Alta and Altustfi is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Alta SA and Altustfi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altustfi and Alta SA 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 Alta SA are associated (or correlated) with Altustfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altustfi has no effect on the direction of Alta SA i.e., Alta SA and Altustfi go up and down completely randomly.

Pair Corralation between Alta SA and Altustfi

Assuming the 90 days trading horizon Alta SA is expected to generate 1.09 times less return on investment than Altustfi. But when comparing it to its historical volatility, Alta SA is 1.05 times less risky than Altustfi. It trades about 0.04 of its potential returns per unit of risk. Altustfi is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  216.00  in Altustfi on December 30, 2024 and sell it today you would earn a total of  13.00  from holding Altustfi or generate 6.02% return on investment over 90 days.

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

Alta SA  vs.  Altustfi

Alta SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alta SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Alta SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Altustfi

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altustfi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Altustfi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Alta SA and Altustfi

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

The idea behind Alta SA and Altustfi 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.