Correlation Between Alta SA and X Trade

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

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

Diversification Opportunities for Alta SA and X Trade

-0.73

Correlation Coefficient

Alta SA  X Trade

Pay attention - limited upside

The 3 months correlation between Alta and XTB is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alta SA and X Trade Brokers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Trade Brokers 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 X Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Trade Brokers has no effect on the direction of Alta SA i.e., Alta SA and X Trade go up and down completely randomly.

Pair Corralation between Alta SA and X Trade

Assuming the 90 days trading horizon Alta SA is expected to under-perform the X Trade. In addition to that, Alta SA is 1.86 times more volatile than X Trade Brokers. It trades about -0.1 of its total potential returns per unit of risk. X Trade Brokers is currently generating about 0.14 per unit of volatility. If you would invest  6,198  in X Trade Brokers on September 13, 2024 and sell it today you would earn a total of  954.00  from holding X Trade Brokers or generate 15.39% return on investment over 90 days.

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

Alta SA  vs.  X Trade Brokers

Alta SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alta SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

X Trade Brokers

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in X Trade Brokers are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, X Trade reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alta SA and X Trade

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

The idea behind Alta SA and X Trade Brokers 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.