Correlation Between Altia Consultores and Metrovacesa

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

Diversification Opportunities for Altia Consultores and Metrovacesa

-0.2

Correlation Coefficient

Altia Consultores  Metrovacesa

Good diversification

The 3 months correlation between Altia and Metrovacesa is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Altia Consultores SA and Metrovacesa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrovacesa 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 Metrovacesa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrovacesa SA has no effect on the direction of Altia Consultores i.e., Altia Consultores and Metrovacesa go up and down completely randomly.

Pair Corralation between Altia Consultores and Metrovacesa

Assuming the 90 days trading horizon Altia Consultores is expected to generate 2.6 times less return on investment than Metrovacesa. In addition to that, Altia Consultores is 2.47 times more volatile than Metrovacesa SA. It trades about 0.02 of its total potential returns per unit of risk. Metrovacesa SA is currently generating about 0.12 per unit of volatility. If you would invest  844.00  in Metrovacesa SA on September 12, 2024 and sell it today you would earn a total of  63.00  from holding Metrovacesa SA or generate 7.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Altia Consultores SA  vs.  Metrovacesa SA

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.

Metrovacesa SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metrovacesa SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Metrovacesa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Altia Consultores and Metrovacesa

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

The idea behind Altia Consultores SA and Metrovacesa 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..