Correlation Between Wendel and Altamir SCA

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

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

Diversification Opportunities for Wendel and Altamir SCA

-0.03

Correlation Coefficient

Wendel  Altamir SCA

Good diversification

The 3 months correlation between Wendel and Altamir is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Wendel and Altamir SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altamir SCA and Wendel 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 Wendel are associated (or correlated) with Altamir SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altamir SCA has no effect on the direction of Wendel i.e., Wendel and Altamir SCA go up and down completely randomly.

Pair Corralation between Wendel and Altamir SCA

Assuming the 90 days horizon Wendel is expected to under-perform the Altamir SCA. But the stock apears to be less risky and, when comparing its historical volatility, Wendel is 1.09 times less risky than Altamir SCA. The stock trades about -0.02 of its potential returns per unit of risk. The Altamir SCA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,230  in Altamir SCA on December 30, 2024 and sell it today you would earn a total of  190.00  from holding Altamir SCA or generate 8.52% return on investment over 90 days.

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

Wendel  vs.  Altamir SCA

Wendel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wendel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Wendel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Altamir SCA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altamir SCA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Altamir SCA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Wendel and Altamir SCA

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

The idea behind Wendel and Altamir SCA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..