Correlation Between Alpha Trust and Autohellas

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

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

Diversification Opportunities for Alpha Trust and Autohellas

0.18

Correlation Coefficient

Alpha Trust  Autohellas

Average diversification

The 3 months correlation between Alpha and Autohellas is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Trust Mutual and Autohellas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohellas SA and Alpha Trust 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 Alpha Trust Mutual are associated (or correlated) with Autohellas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohellas SA has no effect on the direction of Alpha Trust i.e., Alpha Trust and Autohellas go up and down completely randomly.

Pair Corralation between Alpha Trust and Autohellas

Assuming the 90 days trading horizon Alpha Trust is expected to generate 427.5 times less return on investment than Autohellas. But when comparing it to its historical volatility, Alpha Trust Mutual is 3.61 times less risky than Autohellas. It trades about 0.0 of its potential returns per unit of risk. Autohellas SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,038  in Autohellas SA on December 27, 2024 and sell it today you would earn a total of  228.00  from holding Autohellas SA or generate 21.97% return on investment over 90 days.

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

Alpha Trust Mutual  vs.  Autohellas SA

Alpha Trust Mutual

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha Trust Mutual has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alpha Trust is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Autohellas SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Autohellas SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Autohellas sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Trust and Autohellas

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

The idea behind Alpha Trust Mutual and Autohellas 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.