Correlation Between Cirtek Holdings and Alliance Select

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

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

Diversification Opportunities for Cirtek Holdings and Alliance Select

0.04

Correlation Coefficient

Cirtek Holdings  Alliance Select

Significant diversification

The 3 months correlation between Cirtek and Alliance is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cirtek Holdings Philippines and Alliance Select Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Select Foods and Cirtek 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 Cirtek Holdings Philippines are associated (or correlated) with Alliance Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Select Foods has no effect on the direction of Cirtek Holdings i.e., Cirtek Holdings and Alliance Select go up and down completely randomly.

Pair Corralation between Cirtek Holdings and Alliance Select

Assuming the 90 days trading horizon Cirtek Holdings Philippines is expected to under-perform the Alliance Select. In addition to that, Cirtek Holdings is 4.81 times more volatile than Alliance Select Foods. It trades about -0.2 of its total potential returns per unit of risk. Alliance Select Foods is currently generating about -0.29 per unit of volatility. If you would invest  38.00  in Alliance Select Foods on September 28, 2024 and sell it today you would lose (1.00) from holding Alliance Select Foods or give up 2.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

Cirtek Holdings Philippines  vs.  Alliance Select Foods

Cirtek Holdings Phil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirtek Holdings Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Alliance Select Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliance Select Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cirtek Holdings and Alliance Select

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

The idea behind Cirtek Holdings Philippines and Alliance Select Foods 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 CEOs Directory module to screen CEOs from public companies around the world.