Correlation Between Colas SA and Alleghany
Can any of the company-specific risk be diversified away by investing in both Colas SA and Alleghany 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 Colas SA and Alleghany into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colas SA and Alleghany, you can compare the effects of market volatilities on Colas SA and Alleghany 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 Colas SA with a short position of Alleghany. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colas SA and Alleghany.
Diversification Opportunities for Colas SA and Alleghany
Poor diversification
The 3 months correlation between Colas and Alleghany is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Colas SA and Alleghany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alleghany and Colas SA 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 Colas SA are associated (or correlated) with Alleghany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alleghany has no effect on the direction of Colas SA i.e., Colas SA and Alleghany go up and down completely randomly.
Pair Corralation between Colas SA and Alleghany
If you would invest 84,779 in Alleghany on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Alleghany or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Colas SA vs. Alleghany
Performance |
| Timeline |
| Colas SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alleghany |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Colas SA and Alleghany Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colas SA and Alleghany
The main advantage of trading using opposite Colas SA and Alleghany positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colas SA position performs unexpectedly, Alleghany 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 Alleghany will offset losses from the drop in Alleghany's long position.| Colas SA vs. Reinsurance Group of | Colas SA vs. Siriuspoint | Colas SA vs. Brookfield Reinsurance | Colas SA vs. RenaissanceRe Holdings |
| Alleghany vs. Jeld Wen Holding | Alleghany vs. ChampionX | Alleghany vs. Tyson Foods | Alleghany vs. Wicket Gaming AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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