Correlation Between Altamir SCA and Compagnie Des

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

By analyzing existing cross correlation between Altamir SCA and Compagnie des Tramways, you can compare the effects of market volatilities on Altamir SCA and Compagnie Des 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 Altamir SCA with a short position of Compagnie Des. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altamir SCA and Compagnie Des.

Diversification Opportunities for Altamir SCA and Compagnie Des

0.93

Correlation Coefficient

Altamir SCA  Compagnie Des

Almost no diversification

The 3 months correlation between Altamir and Compagnie is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Altamir SCA and Compagnie des Tramways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie des Tramways and Altamir SCA 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 Altamir SCA are associated (or correlated) with Compagnie Des. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie des Tramways has no effect on the direction of Altamir SCA i.e., Altamir SCA and Compagnie Des go up and down completely randomly.

Pair Corralation between Altamir SCA and Compagnie Des

Assuming the 90 days trading horizon Altamir SCA is expected to generate 69.8 times less return on investment than Compagnie Des. In addition to that, Altamir SCA is 1.19 times more volatile than Compagnie des Tramways. It trades about 0.0 of its total potential returns per unit of risk. Compagnie des Tramways is currently generating about 0.03 per unit of volatility. If you would invest  520,000  in Compagnie des Tramways on March 17, 2024 and sell it today you would earn a total of  40,000  from holding Compagnie des Tramways or generate 7.69% return on investment over 90 days.

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

Altamir SCA  vs.  Compagnie des Tramways

Altamir SCA

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altamir SCA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Altamir SCA may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Compagnie des Tramways

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie des Tramways are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Compagnie Des is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Altamir SCA and Compagnie Des

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

The idea behind Altamir SCA and Compagnie des Tramways 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.