Correlation Between Castellana Properties and Altia Consultores

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

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

Diversification Opportunities for Castellana Properties and Altia Consultores

-0.04

Correlation Coefficient

Castellana Properties  Altia Consultores

Good diversification

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

Pair Corralation between Castellana Properties and Altia Consultores

Assuming the 90 days trading horizon Castellana Properties is expected to generate 1.11 times less return on investment than Altia Consultores. But when comparing it to its historical volatility, Castellana Properties Socimi is 6.8 times less risky than Altia Consultores. It trades about 0.26 of its potential returns per unit of risk. Altia Consultores SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  437.00  in Altia Consultores SA on September 14, 2024 and sell it today you would earn a total of  21.00  from holding Altia Consultores SA or generate 4.81% return on investment over 90 days.

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

Castellana Properties Socimi  vs.  Altia Consultores SA

Castellana Properties

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Castellana Properties Socimi are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Castellana Properties is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Altia Consultores

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altia Consultores SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Altia Consultores may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Castellana Properties and Altia Consultores

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

The idea behind Castellana Properties Socimi and Altia Consultores 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.