Correlation Between CBO Territoria and Altareit

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

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

Diversification Opportunities for CBO Territoria and Altareit

-0.32

Correlation Coefficient

CBO Territoria  Altareit

Very good diversification

The 3 months correlation between CBO and Altareit is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CBO Territoria SA and Altareit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altareit and CBO Territoria 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 CBO Territoria SA are associated (or correlated) with Altareit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altareit has no effect on the direction of CBO Territoria i.e., CBO Territoria and Altareit go up and down completely randomly.

Pair Corralation between CBO Territoria and Altareit

Assuming the 90 days trading horizon CBO Territoria is expected to generate 5.4 times less return on investment than Altareit. In addition to that, CBO Territoria is 1.14 times more volatile than Altareit. It trades about 0.04 of its total potential returns per unit of risk. Altareit is currently generating about 0.23 per unit of volatility. If you would invest  47,000  in Altareit on October 9, 2024 and sell it today you would earn a total of  800.00  from holding Altareit or generate 1.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

CBO Territoria SA  vs.  Altareit

CBO Territoria SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Altareit

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altareit are ranked lower than 13 (%) 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.

Pair Trading with CBO Territoria and Altareit

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

The idea behind CBO Territoria SA and Altareit 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.