Correlation Between Assystem and Alten SA

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

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

Diversification Opportunities for Assystem and Alten SA

0.84

Correlation Coefficient

Assystem  Alten SA

Very poor diversification

The 3 months correlation between Assystem and Alten is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Assystem SA and Alten SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alten SA and Assystem 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 Assystem SA are associated (or correlated) with Alten SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alten SA has no effect on the direction of Assystem i.e., Assystem and Alten SA go up and down completely randomly.

Pair Corralation between Assystem and Alten SA

Assuming the 90 days trading horizon Assystem SA is expected to under-perform the Alten SA. In addition to that, Assystem is 1.45 times more volatile than Alten SA. It trades about -0.16 of its total potential returns per unit of risk. Alten SA is currently generating about -0.15 per unit of volatility. If you would invest  9,155  in Alten SA on September 4, 2024 and sell it today you would lose (1,675) from holding Alten SA or give up 18.3% of portfolio value over 90 days.

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

Assystem SA  vs.  Alten SA

Assystem SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assystem SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Alten SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alten SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Assystem and Alten SA

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

The idea behind Assystem SA and Alten SA 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.