Correlation Between Altia Consultores and Amadeus IT

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

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

Diversification Opportunities for Altia Consultores and Amadeus IT

0.07

Correlation Coefficient

Altia Consultores  Amadeus IT

Significant diversification

The 3 months correlation between Altia and Amadeus is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Altia Consultores SA and Amadeus IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Group and Altia Consultores 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 Altia Consultores SA are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Group has no effect on the direction of Altia Consultores i.e., Altia Consultores and Amadeus IT go up and down completely randomly.

Pair Corralation between Altia Consultores and Amadeus IT

Assuming the 90 days trading horizon Altia Consultores is expected to generate 3.62 times less return on investment than Amadeus IT. In addition to that, Altia Consultores is 2.43 times more volatile than Amadeus IT Group. It trades about 0.02 of its total potential returns per unit of risk. Amadeus IT Group is currently generating about 0.16 per unit of volatility. If you would invest  6,244  in Amadeus IT Group on September 12, 2024 and sell it today you would earn a total of  666.00  from holding Amadeus IT Group or generate 10.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Altia Consultores SA  vs.  Amadeus IT Group

Altia Consultores

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altia Consultores SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Altia Consultores is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Amadeus IT Group

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Amadeus IT Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak basic indicators, Amadeus IT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Altia Consultores and Amadeus IT

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

The idea behind Altia Consultores SA and Amadeus IT Group 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.