Correlation Between ALTEO Energiaszolgalta and Budapesti Ingatlan

Can any of the company-specific risk be diversified away by investing in both ALTEO Energiaszolgalta and Budapesti Ingatlan 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 Budapesti Ingatlan 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 Budapesti Ingatlan Hasznositasi, you can compare the effects of market volatilities on ALTEO Energiaszolgalta and Budapesti Ingatlan 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 Budapesti Ingatlan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALTEO Energiaszolgalta and Budapesti Ingatlan.

Diversification Opportunities for ALTEO Energiaszolgalta and Budapesti Ingatlan

0.06

Correlation Coefficient

ALTEO Energiaszolgalta  Budapesti Ingatlan

Significant diversification

The 3 months correlation between ALTEO and Budapesti is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ALTEO Energiaszolgaltato Nyrt and Budapesti Ingatlan Hasznositas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Budapesti Ingatlan 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 Budapesti Ingatlan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Budapesti Ingatlan has no effect on the direction of ALTEO Energiaszolgalta i.e., ALTEO Energiaszolgalta and Budapesti Ingatlan go up and down completely randomly.

Pair Corralation between ALTEO Energiaszolgalta and Budapesti Ingatlan

Assuming the 90 days trading horizon ALTEO Energiaszolgaltato Nyrt is expected to generate 1.07 times more return on investment than Budapesti Ingatlan. However, ALTEO Energiaszolgalta is 1.07 times more volatile than Budapesti Ingatlan Hasznositasi. It trades about 0.15 of its potential returns per unit of risk. Budapesti Ingatlan Hasznositasi is currently generating about 0.07 per unit of risk. If you would invest  435,000  in ALTEO Energiaszolgaltato Nyrt on October 20, 2024 and sell it today you would earn a total of  53,000  from holding ALTEO Energiaszolgaltato Nyrt or generate 12.18% return on investment over 90 days.

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

ALTEO Energiaszolgaltato Nyrt  vs.  Budapesti Ingatlan Hasznositas

ALTEO Energiaszolgalta

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALTEO Energiaszolgaltato Nyrt are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ALTEO Energiaszolgalta sustained solid returns over the last few months and may actually be approaching a breakup point.

Budapesti Ingatlan

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Budapesti Ingatlan Hasznositasi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Budapesti Ingatlan is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ALTEO Energiaszolgalta and Budapesti Ingatlan

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

The idea behind ALTEO Energiaszolgaltato Nyrt and Budapesti Ingatlan Hasznositasi 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.