Correlation Between Patria Bank and Altur Slatina

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

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

Diversification Opportunities for Patria Bank and Altur Slatina

-0.38

Correlation Coefficient

Patria Bank  Altur Slatina

Very good diversification

The 3 months correlation between Patria and Altur is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Patria Bank SA and Altur Slatina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altur Slatina and Patria Bank 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 Patria Bank SA are associated (or correlated) with Altur Slatina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altur Slatina has no effect on the direction of Patria Bank i.e., Patria Bank and Altur Slatina go up and down completely randomly.

Pair Corralation between Patria Bank and Altur Slatina

Assuming the 90 days trading horizon Patria Bank SA is expected to generate 0.42 times more return on investment than Altur Slatina. However, Patria Bank SA is 2.35 times less risky than Altur Slatina. It trades about 0.1 of its potential returns per unit of risk. Altur Slatina is currently generating about -0.03 per unit of risk. If you would invest  7.40  in Patria Bank SA on September 15, 2024 and sell it today you would earn a total of  0.75  from holding Patria Bank SA or generate 10.14% return on investment over 90 days.

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

Patria Bank SA  vs.  Altur Slatina

Patria Bank SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Patria Bank SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking signals, Patria Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Altur Slatina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altur Slatina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Patria Bank and Altur Slatina

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

The idea behind Patria Bank SA and Altur Slatina 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.