Correlation Between Altareit and Altamir SCA

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

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

Diversification Opportunities for Altareit and Altamir SCA

-0.62

Correlation Coefficient

Altareit  Altamir SCA

Excellent diversification

The 3 months correlation between Altareit and Altamir is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Altareit and Altamir SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altamir SCA and Altareit 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 Altareit are associated (or correlated) with Altamir SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altamir SCA has no effect on the direction of Altareit i.e., Altareit and Altamir SCA go up and down completely randomly.

Pair Corralation between Altareit and Altamir SCA

Assuming the 90 days trading horizon Altareit is expected to generate 0.29 times more return on investment than Altamir SCA. However, Altareit is 3.48 times less risky than Altamir SCA. It trades about 0.16 of its potential returns per unit of risk. Altamir SCA is currently generating about -0.08 per unit of risk. If you would invest  45,000  in Altareit on August 31, 2024 and sell it today you would earn a total of  1,800  from holding Altareit or generate 4.0% return on investment over 90 days.

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

Altareit  vs.  Altamir SCA

Altareit

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altareit are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Altareit is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Altamir SCA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altamir SCA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Altareit and Altamir SCA

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

The idea behind Altareit and Altamir SCA 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 Global Correlations module to find global opportunities by holding instruments from different markets.