Correlation Between Altex Industries and Global Acquisitions

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

By analyzing existing cross correlation between Altex Industries and Global Acquisitions, you can compare the effects of market volatilities on Altex Industries and Global Acquisitions 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 Altex Industries with a short position of Global Acquisitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altex Industries and Global Acquisitions.

Diversification Opportunities for Altex Industries and Global Acquisitions

-0.28

Correlation Coefficient

Altex Industries  Global Acquisitions

Very good diversification

The 3 months correlation between Altex and Global is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Altex Industries and Global Acquisitions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Acquisitions and Altex Industries 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 Altex Industries are associated (or correlated) with Global Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Acquisitions has no effect on the direction of Altex Industries i.e., Altex Industries and Global Acquisitions go up and down completely randomly.

Pair Corralation between Altex Industries and Global Acquisitions

Given the investment horizon of 90 days Altex Industries is expected to generate 3.4 times less return on investment than Global Acquisitions. But when comparing it to its historical volatility, Altex Industries is 1.3 times less risky than Global Acquisitions. It trades about 0.03 of its potential returns per unit of risk. Global Acquisitions is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  270.00  in Global Acquisitions on December 27, 2024 and sell it today you would earn a total of  20.00  from holding Global Acquisitions or generate 7.41% return on investment over 90 days.

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

Altex Industries  vs.  Global Acquisitions

Altex Industries

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altex Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Altex Industries showed solid returns over the last few months and may actually be approaching a breakup point.

Global Acquisitions

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Acquisitions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Global Acquisitions reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altex Industries and Global Acquisitions

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

The idea behind Altex Industries and Global Acquisitions 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.