Correlation Between Altia Consultores and Indra A

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

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

Diversification Opportunities for Altia Consultores and Indra A

0.58

Correlation Coefficient

Altia Consultores  Indra A

Very weak diversification

The 3 months correlation between Altia and Indra is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Altia Consultores SA and Indra A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indra A and Altia Consultores 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 Altia Consultores SA are associated (or correlated) with Indra A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indra A has no effect on the direction of Altia Consultores i.e., Altia Consultores and Indra A go up and down completely randomly.

Pair Corralation between Altia Consultores and Indra A

Assuming the 90 days trading horizon Altia Consultores SA is expected to generate 104.77 times more return on investment than Indra A. However, Altia Consultores is 104.77 times more volatile than Indra A. It trades about 0.14 of its potential returns per unit of risk. Indra A is currently generating about 0.08 per unit of risk. If you would invest  2,724  in Altia Consultores SA on September 5, 2024 and sell it today you would lose (2,266) from holding Altia Consultores SA or give up 83.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	92.28%
Values	Daily Returns

Altia Consultores SA  vs.  Indra A

Altia Consultores

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altia Consultores SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Altia Consultores is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Indra A

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Indra A are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Indra A is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Altia Consultores and Indra A

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

The idea behind Altia Consultores SA and Indra A 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.