Correlation Between NBI Bearings and Altia Consultores

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

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

Diversification Opportunities for NBI Bearings and Altia Consultores

-0.13

Correlation Coefficient

NBI Bearings  Altia Consultores

Good diversification

The 3 months correlation between NBI and Altia is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NBI Bearings Europe and Altia Consultores SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Consultores and NBI Bearings 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 NBI Bearings Europe are associated (or correlated) with Altia Consultores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Consultores has no effect on the direction of NBI Bearings i.e., NBI Bearings and Altia Consultores go up and down completely randomly.

Pair Corralation between NBI Bearings and Altia Consultores

Assuming the 90 days trading horizon NBI Bearings Europe is expected to under-perform the Altia Consultores. But the stock apears to be less risky and, when comparing its historical volatility, NBI Bearings Europe is 1.67 times less risky than Altia Consultores. The stock trades about -0.05 of its potential returns per unit of risk. The Altia Consultores SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  444.00  in Altia Consultores SA on December 3, 2024 and sell it today you would earn a total of  26.00  from holding Altia Consultores SA or generate 5.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

NBI Bearings Europe  vs.  Altia Consultores SA

NBI Bearings Europe

Risk-Adjusted Performance

Very Weak

Over the last 90 days NBI Bearings Europe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, NBI Bearings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Altia Consultores

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altia Consultores SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Altia Consultores may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NBI Bearings and Altia Consultores

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

The idea behind NBI Bearings Europe and Altia Consultores 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.