Correlation Between Ailleron and Bank Ochrony

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

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

Diversification Opportunities for Ailleron and Bank Ochrony

0.6

Correlation Coefficient

Ailleron  Bank Ochrony

Poor diversification

The 3 months correlation between Ailleron and Bank is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ailleron SA and Bank Ochrony rodowiska in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ochrony rodowiska and Ailleron 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 Ailleron SA are associated (or correlated) with Bank Ochrony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ochrony rodowiska has no effect on the direction of Ailleron i.e., Ailleron and Bank Ochrony go up and down completely randomly.

Pair Corralation between Ailleron and Bank Ochrony

Assuming the 90 days trading horizon Ailleron is expected to generate 2.86 times less return on investment than Bank Ochrony. But when comparing it to its historical volatility, Ailleron SA is 1.31 times less risky than Bank Ochrony. It trades about 0.08 of its potential returns per unit of risk. Bank Ochrony rodowiska is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  982.00  in Bank Ochrony rodowiska on December 30, 2024 and sell it today you would earn a total of  298.00  from holding Bank Ochrony rodowiska or generate 30.35% return on investment over 90 days.

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

Ailleron SA  vs.  Bank Ochrony rodowiska

Ailleron SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ailleron SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ailleron may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bank Ochrony rodowiska

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Ochrony rodowiska are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bank Ochrony reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ailleron and Bank Ochrony

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

The idea behind Ailleron SA and Bank Ochrony rodowiska 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 Transaction History module to view history of all your transactions and understand their impact on performance.