Correlation Between Semapa and Altri SGPS

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

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

Diversification Opportunities for Semapa and Altri SGPS

0.83

Correlation Coefficient

Semapa  Altri SGPS

Very poor diversification

The 3 months correlation between Semapa and Altri is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Semapa and Altri SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altri SGPS SA and Semapa 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 Semapa are associated (or correlated) with Altri SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altri SGPS SA has no effect on the direction of Semapa i.e., Semapa and Altri SGPS go up and down completely randomly.

Pair Corralation between Semapa and Altri SGPS

Assuming the 90 days trading horizon Semapa is expected to generate 1.32 times less return on investment than Altri SGPS. But when comparing it to its historical volatility, Semapa is 1.11 times less risky than Altri SGPS. It trades about 0.14 of its potential returns per unit of risk. Altri SGPS SA is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  530.00  in Altri SGPS SA on December 30, 2024 and sell it today you would earn a total of  73.00  from holding Altri SGPS SA or generate 13.77% return on investment over 90 days.

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

Semapa  vs.  Altri SGPS SA

Semapa

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Semapa are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Semapa may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Altri SGPS SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altri SGPS SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Altri SGPS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Semapa and Altri SGPS

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

The idea behind Semapa and Altri SGPS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.