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

-0.69

Correlation Coefficient

NBI Bearings  Altia Consultores

Excellent diversification

The 3 months correlation between NBI and Altia is -0.69. 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 1.41 times less risky than Altia Consultores. The stock trades about -0.12 of its potential returns per unit of risk. The Altia Consultores SA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  452.00  in Altia Consultores SA on December 28, 2024 and sell it today you would earn a total of  88.00  from holding Altia Consultores SA or generate 19.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
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 latest unsteady performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Altia Consultores

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altia Consultores SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Altia Consultores exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.