Correlation Between ALTEO Energiaszolgalta and AutoWallis Nyrt

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

By analyzing existing cross correlation between ALTEO Energiaszolgaltato Nyrt and AutoWallis Nyrt, you can compare the effects of market volatilities on ALTEO Energiaszolgalta and AutoWallis Nyrt 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 ALTEO Energiaszolgalta with a short position of AutoWallis Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALTEO Energiaszolgalta and AutoWallis Nyrt.

Diversification Opportunities for ALTEO Energiaszolgalta and AutoWallis Nyrt

0.92

Correlation Coefficient

ALTEO Energiaszolgalta  AutoWallis Nyrt

Almost no diversification

The 3 months correlation between ALTEO and AutoWallis is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ALTEO Energiaszolgaltato Nyrt and AutoWallis Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoWallis Nyrt and ALTEO Energiaszolgalta 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 ALTEO Energiaszolgaltato Nyrt are associated (or correlated) with AutoWallis Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoWallis Nyrt has no effect on the direction of ALTEO Energiaszolgalta i.e., ALTEO Energiaszolgalta and AutoWallis Nyrt go up and down completely randomly.

Pair Corralation between ALTEO Energiaszolgalta and AutoWallis Nyrt

Assuming the 90 days trading horizon ALTEO Energiaszolgaltato Nyrt is expected to generate 1.13 times more return on investment than AutoWallis Nyrt. However, ALTEO Energiaszolgalta is 1.13 times more volatile than AutoWallis Nyrt. It trades about 0.1 of its potential returns per unit of risk. AutoWallis Nyrt is currently generating about 0.09 per unit of risk. If you would invest  255,780  in ALTEO Energiaszolgaltato Nyrt on December 4, 2024 and sell it today you would earn a total of  344,220  from holding ALTEO Energiaszolgaltato Nyrt or generate 134.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

ALTEO Energiaszolgaltato Nyrt  vs.  AutoWallis Nyrt

ALTEO Energiaszolgalta

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ALTEO Energiaszolgaltato Nyrt are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, ALTEO Energiaszolgalta sustained solid returns over the last few months and may actually be approaching a breakup point.

AutoWallis Nyrt

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AutoWallis Nyrt are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, AutoWallis Nyrt sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALTEO Energiaszolgalta and AutoWallis Nyrt

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

The idea behind ALTEO Energiaszolgaltato Nyrt and AutoWallis Nyrt 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.