Correlation Between NTT DATA and Alten SA
Can any of the company-specific risk be diversified away by investing in both NTT DATA and Alten SA 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 NTT DATA and Alten SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NTT DATA and Alten SA, you can compare the effects of market volatilities on NTT DATA and Alten SA 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 NTT DATA with a short position of Alten SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTT DATA and Alten SA.
Diversification Opportunities for NTT DATA and Alten SA
Significant diversification
The 3 months correlation between NTT and Alten is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding NTT DATA and Alten SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alten SA and NTT DATA 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 NTT DATA are associated (or correlated) with Alten SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alten SA has no effect on the direction of NTT DATA i.e., NTT DATA and Alten SA go up and down completely randomly.
Pair Corralation between NTT DATA and Alten SA
Assuming the 90 days horizon NTT DATA is expected to generate 75.73 times more return on investment than Alten SA. However, NTT DATA is 75.73 times more volatile than Alten SA. It trades about 0.17 of its potential returns per unit of risk. Alten SA is currently generating about -0.14 per unit of risk. If you would invest 1,490 in NTT DATA on January 16, 2024 and sell it today you would lose (80.00) from holding NTT DATA or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTT DATA vs. Alten SA
Performance |
| Timeline |
| NTT DATA |
| Alten SA |
NTT DATA and Alten SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTT DATA and Alten SA
The main advantage of trading using opposite NTT DATA and Alten SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTT DATA position performs unexpectedly, Alten SA 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 Alten SA will offset losses from the drop in Alten SA's long position.| NTT DATA vs. CNVISION MEDIA | NTT DATA vs. Dave Busters Entertainment | NTT DATA vs. PARKEN Sport Entertainment | NTT DATA vs. Flutter Entertainment PLC |
| Alten SA vs. AHT Syngas Technology | Alten SA vs. Align Technology | Alten SA vs. Check Point Software | Alten SA vs. Darden Restaurants |
Check out your portfolio center.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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