Correlation Between Amedeo Air and Alior Bank

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

By analyzing existing cross correlation between Amedeo Air Four and Alior Bank SA, you can compare the effects of market volatilities on Amedeo Air and Alior Bank 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 Amedeo Air with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and Alior Bank.

Diversification Opportunities for Amedeo Air and Alior Bank

0.35

Correlation Coefficient

Amedeo Air  Alior Bank

Weak diversification

The 3 months correlation between Amedeo and Alior is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and Amedeo Air 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 Amedeo Air Four are associated (or correlated) with Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of Amedeo Air i.e., Amedeo Air and Alior Bank go up and down completely randomly.

Pair Corralation between Amedeo Air and Alior Bank

Assuming the 90 days trading horizon Amedeo Air Four is expected to generate 0.14 times more return on investment than Alior Bank. However, Amedeo Air Four is 7.35 times less risky than Alior Bank. It trades about 0.34 of its potential returns per unit of risk. Alior Bank SA is currently generating about 0.02 per unit of risk. If you would invest  4,972  in Amedeo Air Four on September 30, 2024 and sell it today you would earn a total of  678.00  from holding Amedeo Air Four or generate 13.64% return on investment over 90 days.

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

Amedeo Air Four  vs.  Alior Bank SA

Amedeo Air Four

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Amedeo Air Four are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Amedeo Air exhibited solid returns over the last few months and may actually be approaching a breakup point.

Alior Bank SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alior Bank SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Alior Bank is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Amedeo Air and Alior Bank

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

The idea behind Amedeo Air Four and Alior Bank 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.