Correlation Between Alior Bank and Creotech Instruments

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

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

Diversification Opportunities for Alior Bank and Creotech Instruments

0.19

Correlation Coefficient

Alior Bank  Creotech Instruments

Average diversification

The 3 months correlation between Alior and Creotech is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Creotech Instruments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creotech Instruments and Alior Bank 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 Alior Bank SA are associated (or correlated) with Creotech Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creotech Instruments has no effect on the direction of Alior Bank i.e., Alior Bank and Creotech Instruments go up and down completely randomly.

Pair Corralation between Alior Bank and Creotech Instruments

Assuming the 90 days trading horizon Alior Bank SA is expected to generate 0.81 times more return on investment than Creotech Instruments. However, Alior Bank SA is 1.24 times less risky than Creotech Instruments. It trades about -0.03 of its potential returns per unit of risk. Creotech Instruments SA is currently generating about -0.1 per unit of risk. If you would invest  9,458  in Alior Bank SA on September 13, 2024 and sell it today you would lose (562.00) from holding Alior Bank SA or give up 5.94% of portfolio value over 90 days.

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

Alior Bank SA  vs.  Creotech Instruments SA

Alior Bank SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alior Bank SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Alior Bank is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Creotech Instruments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creotech Instruments SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Alior Bank and Creotech Instruments

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

The idea behind Alior Bank SA and Creotech Instruments 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.