Correlation Between Memscap Regpt and Alten SA

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

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

Diversification Opportunities for Memscap Regpt and Alten SA

0.23

Correlation Coefficient

Memscap Regpt  Alten SA

Modest diversification

The 3 months correlation between Memscap and Alten is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Memscap Regpt and Alten SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alten SA and Memscap Regpt 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 Memscap Regpt are associated (or correlated) with Alten SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alten SA has no effect on the direction of Memscap Regpt i.e., Memscap Regpt and Alten SA go up and down completely randomly.

Pair Corralation between Memscap Regpt and Alten SA

Assuming the 90 days trading horizon Memscap Regpt is expected to generate 2.24 times more return on investment than Alten SA. However, Memscap Regpt is 2.24 times more volatile than Alten SA. It trades about 0.03 of its potential returns per unit of risk. Alten SA is currently generating about -0.2 per unit of risk. If you would invest  463.00  in Memscap Regpt on September 28, 2024 and sell it today you would earn a total of  9.00  from holding Memscap Regpt or generate 1.94% return on investment over 90 days.

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

Memscap Regpt  vs.  Alten SA

Memscap Regpt

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Memscap Regpt are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Memscap Regpt may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Alten SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alten SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Memscap Regpt and Alten SA

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

The idea behind Memscap Regpt and Alten 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.