Correlation Between Ferrovial and Altia Consultores

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

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

Diversification Opportunities for Ferrovial and Altia Consultores

-0.04

Correlation Coefficient

Ferrovial  Altia Consultores

Good diversification

The 3 months correlation between Ferrovial and Altia is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ferrovial and Altia Consultores SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Consultores and Ferrovial 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 Ferrovial are associated (or correlated) with Altia Consultores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Consultores has no effect on the direction of Ferrovial i.e., Ferrovial and Altia Consultores go up and down completely randomly.

Pair Corralation between Ferrovial and Altia Consultores

Assuming the 90 days trading horizon Ferrovial is expected to generate 0.55 times more return on investment than Altia Consultores. However, Ferrovial is 1.8 times less risky than Altia Consultores. It trades about 0.12 of its potential returns per unit of risk. Altia Consultores SA is currently generating about 0.01 per unit of risk. If you would invest  3,709  in Ferrovial on September 5, 2024 and sell it today you would earn a total of  361.00  from holding Ferrovial or generate 9.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Ferrovial  vs.  Altia Consultores SA

Ferrovial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ferrovial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Ferrovial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Altia Consultores

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altia Consultores SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Altia Consultores is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ferrovial and Altia Consultores

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

The idea behind Ferrovial and Altia Consultores 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.