Correlation Between Alten SA and Synergie

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

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

Diversification Opportunities for Alten SA and Synergie

0.78

Correlation Coefficient

Alten SA  Synergie

Poor diversification

The 3 months correlation between Alten and Synergie is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alten SA and Synergie SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synergie SE and Alten 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 Alten SA are associated (or correlated) with Synergie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synergie SE has no effect on the direction of Alten SA i.e., Alten SA and Synergie go up and down completely randomly.

Pair Corralation between Alten SA and Synergie

Assuming the 90 days trading horizon Alten SA is expected to under-perform the Synergie. In addition to that, Alten SA is 1.13 times more volatile than Synergie SE. It trades about -0.16 of its total potential returns per unit of risk. Synergie SE is currently generating about -0.02 per unit of volatility. If you would invest  3,120  in Synergie SE on September 14, 2024 and sell it today you would lose (100.00) from holding Synergie SE or give up 3.21% of portfolio value over 90 days.

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

Alten SA  vs.  Synergie SE

Alten SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alten SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Synergie SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synergie SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Synergie is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alten SA and Synergie

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

The idea behind Alten SA and Synergie SE 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.