Correlation Between Ellaktor and Alpha Trust

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

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

Diversification Opportunities for Ellaktor and Alpha Trust

-0.38

Correlation Coefficient

Ellaktor  Alpha Trust

Very good diversification

The 3 months correlation between Ellaktor and Alpha is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ellaktor SA and Alpha Trust Andromeda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Trust Andromeda and Ellaktor 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 Ellaktor SA are associated (or correlated) with Alpha Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Trust Andromeda has no effect on the direction of Ellaktor i.e., Ellaktor and Alpha Trust go up and down completely randomly.

Pair Corralation between Ellaktor and Alpha Trust

Assuming the 90 days trading horizon Ellaktor SA is expected to under-perform the Alpha Trust. In addition to that, Ellaktor is 7.22 times more volatile than Alpha Trust Andromeda. It trades about -0.09 of its total potential returns per unit of risk. Alpha Trust Andromeda is currently generating about 0.14 per unit of volatility. If you would invest  630.00  in Alpha Trust Andromeda on December 26, 2024 and sell it today you would earn a total of  38.00  from holding Alpha Trust Andromeda or generate 6.03% return on investment over 90 days.

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

Ellaktor SA  vs.  Alpha Trust Andromeda

Ellaktor SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ellaktor SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Alpha Trust Andromeda

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Trust Andromeda are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Alpha Trust may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ellaktor and Alpha Trust

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

The idea behind Ellaktor SA and Alpha Trust Andromeda 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..