Correlation Between Altur Slatina and Societatea

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

By analyzing existing cross correlation between Altur Slatina and Societatea de Investitii, you can compare the effects of market volatilities on Altur Slatina and Societatea 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 Altur Slatina with a short position of Societatea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altur Slatina and Societatea.

Diversification Opportunities for Altur Slatina and Societatea

0.2

Correlation Coefficient

Altur Slatina  Societatea

Modest diversification

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

Pair Corralation between Altur Slatina and Societatea

Assuming the 90 days trading horizon Altur Slatina is expected to under-perform the Societatea. In addition to that, Altur Slatina is 3.58 times more volatile than Societatea de Investitii. It trades about -0.04 of its total potential returns per unit of risk. Societatea de Investitii is currently generating about -0.01 per unit of volatility. If you would invest  174.00  in Societatea de Investitii on September 14, 2024 and sell it today you would lose (2.00) from holding Societatea de Investitii or give up 1.15% of portfolio value over 90 days.

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

Altur Slatina  vs.  Societatea de Investitii

Altur Slatina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altur Slatina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Societatea de Investitii

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Societatea de Investitii has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Societatea is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Altur Slatina and Societatea

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

The idea behind Altur Slatina and Societatea de Investitii 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.