Correlation Between Alfa Holdings and Invesco

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

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

Diversification Opportunities for Alfa Holdings and Invesco

0.0

Correlation Coefficient

Alfa Holdings  Invesco

Pay attention - limited upside

The 3 months correlation between Alfa and Invesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Holdings SA and Invesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco and Alfa Holdings 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 Alfa Holdings SA are associated (or correlated) with Invesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco has no effect on the direction of Alfa Holdings i.e., Alfa Holdings and Invesco go up and down completely randomly.

Pair Corralation between Alfa Holdings and Invesco

If you would invest  10,425  in Invesco on October 21, 2024 and sell it today you would lose (155.00) from holding Invesco or give up 1.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alfa Holdings SA  vs.  Invesco

Alfa Holdings SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alfa Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Alfa Holdings is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Invesco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Invesco is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alfa Holdings and Invesco

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

The idea behind Alfa Holdings SA and Invesco 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.