Correlation Between Alior Bank and Intersport Polska

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

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

Diversification Opportunities for Alior Bank and Intersport Polska

-0.17

Correlation Coefficient

Alior Bank  Intersport Polska

Good diversification

The 3 months correlation between Alior and Intersport is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Intersport Polska SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intersport Polska and Alior Bank 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 Alior Bank SA are associated (or correlated) with Intersport Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intersport Polska has no effect on the direction of Alior Bank i.e., Alior Bank and Intersport Polska go up and down completely randomly.

Pair Corralation between Alior Bank and Intersport Polska

Assuming the 90 days trading horizon Alior Bank SA is expected to under-perform the Intersport Polska. But the stock apears to be less risky and, when comparing its historical volatility, Alior Bank SA is 2.16 times less risky than Intersport Polska. The stock trades about -0.02 of its potential returns per unit of risk. The Intersport Polska SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Intersport Polska SA on September 14, 2024 and sell it today you would lose (1.00) from holding Intersport Polska SA or give up 1.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alior Bank SA  vs.  Intersport Polska SA

Alior Bank SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alior Bank SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Alior Bank is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Intersport Polska

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intersport Polska SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Intersport Polska is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Alior Bank and Intersport Polska

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

The idea behind Alior Bank SA and Intersport Polska 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..