Correlation Between Sancus Lending and Alfa Financial

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

By analyzing existing cross correlation between Sancus Lending Group and Alfa Financial Software, you can compare the effects of market volatilities on Sancus Lending and Alfa Financial 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 Sancus Lending with a short position of Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sancus Lending and Alfa Financial.

Diversification Opportunities for Sancus Lending and Alfa Financial

0.73

Correlation Coefficient

Sancus Lending  Alfa Financial

Poor diversification

The 3 months correlation between Sancus and Alfa is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sancus Lending Group and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software and Sancus Lending 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 Sancus Lending Group are associated (or correlated) with Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Sancus Lending i.e., Sancus Lending and Alfa Financial go up and down completely randomly.

Pair Corralation between Sancus Lending and Alfa Financial

Assuming the 90 days trading horizon Sancus Lending Group is expected to generate 3.51 times more return on investment than Alfa Financial. However, Sancus Lending is 3.51 times more volatile than Alfa Financial Software. It trades about 0.08 of its potential returns per unit of risk. Alfa Financial Software is currently generating about 0.05 per unit of risk. If you would invest  45.00  in Sancus Lending Group on December 23, 2024 and sell it today you would earn a total of  9.00  from holding Sancus Lending Group or generate 20.0% return on investment over 90 days.

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

Sancus Lending Group  vs.  Alfa Financial Software

Sancus Lending Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sancus Lending Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sancus Lending unveiled solid returns over the last few months and may actually be approaching a breakup point.

Alfa Financial Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alfa Financial Software are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Alfa Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sancus Lending and Alfa Financial

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

The idea behind Sancus Lending Group and Alfa Financial Software 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.