Correlation Between Eurazeo and Altamir SCA

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

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

Diversification Opportunities for Eurazeo and Altamir SCA

0.26

Correlation Coefficient

Eurazeo  Altamir SCA

Modest diversification

The 3 months correlation between Eurazeo and Altamir is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Eurazeo and Altamir SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altamir SCA and Eurazeo 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 Eurazeo 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 Eurazeo i.e., Eurazeo and Altamir SCA go up and down completely randomly.

Pair Corralation between Eurazeo and Altamir SCA

Assuming the 90 days horizon Eurazeo is expected to generate 9.4 times less return on investment than Altamir SCA. In addition to that, Eurazeo is 1.03 times more volatile than Altamir SCA. It trades about 0.01 of its total potential returns per unit of risk. Altamir SCA is currently generating about 0.1 per unit of volatility. 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eurazeo  vs.  Altamir SCA

Eurazeo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eurazeo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Eurazeo 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 Eurazeo and Altamir SCA

The main advantage of trading using opposite Eurazeo and Altamir SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurazeo 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 Eurazeo 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.