Correlation Between Alro Slatina and Aerostar Bacau
Can any of the company-specific risk be diversified away by investing in both Alro Slatina and Aerostar Bacau 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 Alro Slatina and Aerostar Bacau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alro Slatina and Aerostar Bacau, you can compare the effects of market volatilities on Alro Slatina and Aerostar Bacau 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 Alro Slatina with a short position of Aerostar Bacau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alro Slatina and Aerostar Bacau.
Diversification Opportunities for Alro Slatina and Aerostar Bacau
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alro and Aerostar is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Alro Slatina and Aerostar Bacau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerostar Bacau and Alro Slatina 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 Alro Slatina are associated (or correlated) with Aerostar Bacau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerostar Bacau has no effect on the direction of Alro Slatina i.e., Alro Slatina and Aerostar Bacau go up and down completely randomly.
Pair Corralation between Alro Slatina and Aerostar Bacau
Assuming the 90 days trading horizon Alro Slatina is expected to generate 0.77 times more return on investment than Aerostar Bacau. However, Alro Slatina is 1.29 times less risky than Aerostar Bacau. It trades about 0.09 of its potential returns per unit of risk. Aerostar Bacau is currently generating about 0.02 per unit of risk. If you would invest 152.00 in Alro Slatina on December 2, 2024 and sell it today you would earn a total of 11.00 from holding Alro Slatina or generate 7.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Alro Slatina vs. Aerostar Bacau
Performance |
Timeline |
Alro Slatina |
Aerostar Bacau |
Alro Slatina and Aerostar Bacau Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alro Slatina and Aerostar Bacau
The main advantage of trading using opposite Alro Slatina and Aerostar Bacau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alro Slatina position performs unexpectedly, Aerostar Bacau 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 Aerostar Bacau will offset losses from the drop in Aerostar Bacau's long position.Alro Slatina vs. IHUNT TECHNOLOGY IMPORT EXPORT | Alro Slatina vs. IM Vinaria Purcari | Alro Slatina vs. Digi Communications NV | Alro Slatina vs. Turism Hotelur |
Aerostar Bacau vs. Digi Communications NV | Aerostar Bacau vs. Erste Group Bank | Aerostar Bacau vs. IM Vinaria Purcari | Aerostar Bacau vs. Patria Bank SA |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |