Correlation Between Aerostar Bacau and Altur Slatina

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

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

Diversification Opportunities for Aerostar Bacau and Altur Slatina

0.54

Correlation Coefficient

Aerostar Bacau  Altur Slatina

Very weak diversification

The 3 months correlation between Aerostar and Altur is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aerostar Bacau and Altur Slatina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altur Slatina and Aerostar Bacau 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 Aerostar Bacau are associated (or correlated) with Altur Slatina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altur Slatina has no effect on the direction of Aerostar Bacau i.e., Aerostar Bacau and Altur Slatina go up and down completely randomly.

Pair Corralation between Aerostar Bacau and Altur Slatina

Assuming the 90 days trading horizon Aerostar Bacau is expected to generate 1.01 times less return on investment than Altur Slatina. But when comparing it to its historical volatility, Aerostar Bacau is 1.66 times less risky than Altur Slatina. It trades about 0.2 of its potential returns per unit of risk. Altur Slatina is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6.80  in Altur Slatina on December 2, 2024 and sell it today you would earn a total of  0.40  from holding Altur Slatina or generate 5.88% return on investment over 90 days.

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

Aerostar Bacau  vs.  Altur Slatina

Aerostar Bacau

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aerostar Bacau are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Aerostar Bacau is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Altur Slatina

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altur Slatina are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Altur Slatina may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aerostar Bacau and Altur Slatina

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

The idea behind Aerostar Bacau and Altur Slatina 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .