Correlation Between Alior Bank and New Tech

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

Diversification Opportunities for Alior Bank and New Tech

0.59

Correlation Coefficient

Alior Bank  New Tech

Very weak diversification

The 3 months correlation between Alior and New is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and New Tech Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Capital 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 New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Capital has no effect on the direction of Alior Bank i.e., Alior Bank and New Tech go up and down completely randomly.

Pair Corralation between Alior Bank and New Tech

Assuming the 90 days trading horizon Alior Bank SA is expected to under-perform the New Tech. But the stock apears to be less risky and, when comparing its historical volatility, Alior Bank SA is 2.68 times less risky than New Tech. The stock trades about -0.04 of its potential returns per unit of risk. The New Tech Capital is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  77.00  in New Tech Capital on October 10, 2024 and sell it today you would earn a total of  8.00  from holding New Tech Capital or generate 10.39% return on investment over 90 days.

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

Alior Bank SA  vs.  New Tech Capital

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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

New Tech Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Tech Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Alior Bank and New Tech

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

The idea behind Alior Bank SA and New Tech Capital 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.