Correlation Between Autogrill SpA and Alsea SAB

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

By analyzing existing cross correlation between Autogrill SpA ADR and Alsea SAB de, you can compare the effects of market volatilities on Autogrill SpA and Alsea SAB 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 Autogrill SpA with a short position of Alsea SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autogrill SpA and Alsea SAB.

Diversification Opportunities for Autogrill SpA and Alsea SAB

-0.37

Correlation Coefficient

Autogrill SpA  Alsea SAB

Very good diversification

The 3 months correlation between Autogrill and Alsea is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Autogrill SpA ADR and Alsea SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alsea SAB de and Autogrill SpA 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 Autogrill SpA ADR are associated (or correlated) with Alsea SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alsea SAB de has no effect on the direction of Autogrill SpA i.e., Autogrill SpA and Alsea SAB go up and down completely randomly.

Pair Corralation between Autogrill SpA and Alsea SAB

If you would invest  825.00  in Autogrill SpA ADR on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Autogrill SpA ADR or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Autogrill SpA ADR  vs.  Alsea SAB de

Autogrill SpA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autogrill SpA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Autogrill SpA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alsea SAB de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alsea SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Autogrill SpA and Alsea SAB

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

The idea behind Autogrill SpA ADR and Alsea SAB de 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.