Correlation Between Jeronimo Martins and Altri SGPS

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

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

Diversification Opportunities for Jeronimo Martins and Altri SGPS

0.21

Correlation Coefficient

Jeronimo Martins  Altri SGPS

Modest diversification

The 3 months correlation between Jeronimo and Altri is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Jeronimo Martins SGPS and Altri SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altri SGPS SA and Jeronimo Martins 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 Jeronimo Martins SGPS are associated (or correlated) with Altri SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altri SGPS SA has no effect on the direction of Jeronimo Martins i.e., Jeronimo Martins and Altri SGPS go up and down completely randomly.

Pair Corralation between Jeronimo Martins and Altri SGPS

Assuming the 90 days trading horizon Jeronimo Martins SGPS is expected to generate 1.63 times more return on investment than Altri SGPS. However, Jeronimo Martins is 1.63 times more volatile than Altri SGPS SA. It trades about 0.1 of its potential returns per unit of risk. Altri SGPS SA is currently generating about 0.09 per unit of risk. If you would invest  1,676  in Jeronimo Martins SGPS on September 16, 2024 and sell it today you would earn a total of  200.00  from holding Jeronimo Martins SGPS or generate 11.93% return on investment over 90 days.

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

Jeronimo Martins SGPS  vs.  Altri SGPS SA

Jeronimo Martins SGPS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jeronimo Martins SGPS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Jeronimo Martins may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Altri SGPS SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altri SGPS SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Altri SGPS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jeronimo Martins and Altri SGPS

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

The idea behind Jeronimo Martins SGPS and Altri SGPS 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.