Correlation Between Altia Consultores and Izertis Sa

Can any of the company-specific risk be diversified away by investing in both Altia Consultores and Izertis Sa 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 Izertis Sa 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 Izertis Sa, you can compare the effects of market volatilities on Altia Consultores and Izertis Sa 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 Izertis Sa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altia Consultores and Izertis Sa.

Diversification Opportunities for Altia Consultores and Izertis Sa

-0.3

Correlation Coefficient

Altia Consultores  Izertis Sa

Very good diversification

The 3 months correlation between Altia and Izertis is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Altia Consultores SA and Izertis Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Izertis Sa 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 Izertis Sa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Izertis Sa has no effect on the direction of Altia Consultores i.e., Altia Consultores and Izertis Sa go up and down completely randomly.

Pair Corralation between Altia Consultores and Izertis Sa

Assuming the 90 days trading horizon Altia Consultores SA is expected to generate 2.23 times more return on investment than Izertis Sa. However, Altia Consultores is 2.23 times more volatile than Izertis Sa. It trades about 0.16 of its potential returns per unit of risk. Izertis Sa is currently generating about -0.05 per unit of risk. If you would invest  452.00  in Altia Consultores SA on December 30, 2024 and sell it today you would earn a total of  88.00  from holding Altia Consultores SA or generate 19.47% return on investment over 90 days.

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

Altia Consultores SA  vs.  Izertis Sa

Altia Consultores

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altia Consultores SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Altia Consultores exhibited solid returns over the last few months and may actually be approaching a breakup point.

Izertis Sa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Izertis Sa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Izertis Sa 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 Izertis Sa

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

The idea behind Altia Consultores SA and Izertis Sa 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.