Correlation Between Alphabet and SENKO GROUP

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

By analyzing existing cross correlation between Alphabet Inc Class C and SENKO GROUP HOLDINGS, you can compare the effects of market volatilities on Alphabet and SENKO GROUP 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 Alphabet with a short position of SENKO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and SENKO GROUP.

Diversification Opportunities for Alphabet and SENKO GROUP

0.71

Correlation Coefficient

Alphabet  SENKO GROUP

Poor diversification

The 3 months correlation between Alphabet and SENKO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and SENKO GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENKO GROUP HOLDINGS and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with SENKO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENKO GROUP HOLDINGS has no effect on the direction of Alphabet i.e., Alphabet and SENKO GROUP go up and down completely randomly.

Pair Corralation between Alphabet and SENKO GROUP

Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 1.39 times more return on investment than SENKO GROUP. However, Alphabet is 1.39 times more volatile than SENKO GROUP HOLDINGS. It trades about 0.1 of its potential returns per unit of risk. SENKO GROUP HOLDINGS is currently generating about 0.05 per unit of risk. If you would invest  8,839  in Alphabet Inc Class C on September 25, 2024 and sell it today you would earn a total of  10,839  from holding Alphabet Inc Class C or generate 122.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.42%
Values	Daily Returns

Alphabet Inc Class C  vs.  SENKO GROUP HOLDINGS

Alphabet Class C

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

SENKO GROUP HOLDINGS

Risk-Adjusted Performance

18 of 100

Solid

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

Pair Trading with Alphabet and SENKO GROUP

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

The idea behind Alphabet Inc Class C and SENKO GROUP HOLDINGS 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.