Correlation Between Marfin Investment and Alpha Trust

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

By analyzing existing cross correlation between Marfin Investment Group and Alpha Trust Andromeda, you can compare the effects of market volatilities on Marfin Investment and Alpha Trust 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 Marfin Investment with a short position of Alpha Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfin Investment and Alpha Trust.

Diversification Opportunities for Marfin Investment and Alpha Trust

0.31

Correlation Coefficient

Marfin Investment  Alpha Trust

Weak diversification

The 3 months correlation between Marfin and Alpha is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Marfin Investment Group and Alpha Trust Andromeda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Trust Andromeda and Marfin Investment 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 Marfin Investment Group are associated (or correlated) with Alpha Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Trust Andromeda has no effect on the direction of Marfin Investment i.e., Marfin Investment and Alpha Trust go up and down completely randomly.

Pair Corralation between Marfin Investment and Alpha Trust

Assuming the 90 days trading horizon Marfin Investment Group is expected to under-perform the Alpha Trust. In addition to that, Marfin Investment is 2.04 times more volatile than Alpha Trust Andromeda. It trades about -0.1 of its total potential returns per unit of risk. Alpha Trust Andromeda is currently generating about 0.03 per unit of volatility. If you would invest  626.00  in Alpha Trust Andromeda on October 10, 2024 and sell it today you would earn a total of  20.00  from holding Alpha Trust Andromeda or generate 3.19% return on investment over 90 days.

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

Marfin Investment Group  vs.  Alpha Trust Andromeda

Marfin Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marfin Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Alpha Trust Andromeda

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Trust Andromeda are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alpha Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marfin Investment and Alpha Trust

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

The idea behind Marfin Investment Group and Alpha Trust Andromeda 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.