Correlation Between 90331HPL1 and Altice

Can any of the company-specific risk be diversified away by investing in both 90331HPL1 and Altice 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 90331HPL1 and Altice into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US BANK NATIONAL and Altice France 8125, you can compare the effects of market volatilities on 90331HPL1 and Altice 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 90331HPL1 with a short position of Altice. Check out your portfolio center. Please also check ongoing floating volatility patterns of 90331HPL1 and Altice.

Diversification Opportunities for 90331HPL1 and Altice

-0.31

Correlation Coefficient

90331HPL1  Altice

Very good diversification

The 3 months correlation between 90331HPL1 and Altice is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding US BANK NATIONAL and Altice France 8125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altice France 8125 and 90331HPL1 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 US BANK NATIONAL are associated (or correlated) with Altice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altice France 8125 has no effect on the direction of 90331HPL1 i.e., 90331HPL1 and Altice go up and down completely randomly.

Pair Corralation between 90331HPL1 and Altice

Assuming the 90 days trading horizon US BANK NATIONAL is expected to under-perform the Altice. But the bond apears to be less risky and, when comparing its historical volatility, US BANK NATIONAL is 2.29 times less risky than Altice. The bond trades about -0.04 of its potential returns per unit of risk. The Altice France 8125 is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  8,150  in Altice France 8125 on September 4, 2024 and sell it today you would earn a total of  1,146  from holding Altice France 8125 or generate 14.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	72.55%
Values	Daily Returns

US BANK NATIONAL  vs.  Altice France 8125

US BANK NATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US BANK NATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 90331HPL1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Altice France 8125

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altice France 8125 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Altice sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 90331HPL1 and Altice

The main advantage of trading using opposite 90331HPL1 and Altice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 90331HPL1 position performs unexpectedly, Altice 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 Altice will offset losses from the drop in Altice's long position.

The idea behind US BANK NATIONAL and Altice France 8125 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.