Correlation Between Stellus Capital and Alvarium Tiedemann

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

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

Diversification Opportunities for Stellus Capital and Alvarium Tiedemann

-0.87

Correlation Coefficient

Stellus Capital  Alvarium Tiedemann

Pay attention - limited upside

The 3 months correlation between Stellus and Alvarium is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Stellus Capital Investment and Alvarium Tiedemann Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvarium Tiedemann and Stellus Capital 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 Stellus Capital Investment are associated (or correlated) with Alvarium Tiedemann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvarium Tiedemann has no effect on the direction of Stellus Capital i.e., Stellus Capital and Alvarium Tiedemann go up and down completely randomly.

Pair Corralation between Stellus Capital and Alvarium Tiedemann

Considering the 90-day investment horizon Stellus Capital Investment is expected to generate 0.19 times more return on investment than Alvarium Tiedemann. However, Stellus Capital Investment is 5.22 times less risky than Alvarium Tiedemann. It trades about 0.34 of its potential returns per unit of risk. Alvarium Tiedemann Holdings is currently generating about -0.15 per unit of risk. If you would invest  1,457  in Stellus Capital Investment on December 2, 2024 and sell it today you would earn a total of  70.00  from holding Stellus Capital Investment or generate 4.8% return on investment over 90 days.

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

Stellus Capital Investment  vs.  Alvarium Tiedemann Holdings

Stellus Capital Inve

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stellus Capital Investment are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Stellus Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Alvarium Tiedemann

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alvarium Tiedemann Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Stellus Capital and Alvarium Tiedemann

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

The idea behind Stellus Capital Investment and Alvarium Tiedemann Holdings 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.