Correlation Between Beta MWIG40TR and Altustfi

Can any of the company-specific risk be diversified away by investing in both Beta MWIG40TR and Altustfi 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 Beta MWIG40TR and Altustfi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Beta mWIG40TR Portfelowy and Altustfi, you can compare the effects of market volatilities on Beta MWIG40TR and Altustfi 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 Beta MWIG40TR with a short position of Altustfi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beta MWIG40TR and Altustfi.

Diversification Opportunities for Beta MWIG40TR and Altustfi

0.6

Correlation Coefficient

Beta MWIG40TR  Altustfi

Poor diversification

The 3 months correlation between Beta and Altustfi is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Beta mWIG40TR Portfelowy and Altustfi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altustfi and Beta MWIG40TR 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 Beta mWIG40TR Portfelowy are associated (or correlated) with Altustfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altustfi has no effect on the direction of Beta MWIG40TR i.e., Beta MWIG40TR and Altustfi go up and down completely randomly.

Pair Corralation between Beta MWIG40TR and Altustfi

Assuming the 90 days trading horizon Beta mWIG40TR Portfelowy is expected to generate 0.3 times more return on investment than Altustfi. However, Beta mWIG40TR Portfelowy is 3.36 times less risky than Altustfi. It trades about -0.09 of its potential returns per unit of risk. Altustfi is currently generating about -0.12 per unit of risk. If you would invest  9,909  in Beta mWIG40TR Portfelowy on September 2, 2024 and sell it today you would lose (527.00) from holding Beta mWIG40TR Portfelowy or give up 5.32% of portfolio value over 90 days.

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

Beta mWIG40TR Portfelowy  vs.  Altustfi

Beta mWIG40TR Portfelowy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beta mWIG40TR Portfelowy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Beta MWIG40TR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Altustfi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altustfi has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Beta MWIG40TR and Altustfi

The main advantage of trading using opposite Beta MWIG40TR and Altustfi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beta MWIG40TR position performs unexpectedly, Altustfi 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 Altustfi will offset losses from the drop in Altustfi's long position.

The idea behind Beta mWIG40TR Portfelowy and Altustfi 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.