Correlation Between Altamir SCA and Fonciere Inea

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

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

Diversification Opportunities for Altamir SCA and Fonciere Inea

-0.58

Correlation Coefficient

Altamir SCA  Fonciere Inea

Excellent diversification

The 3 months correlation between Altamir and Fonciere is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Altamir SCA and Fonciere Inea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonciere Inea and Altamir SCA 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 Altamir SCA are associated (or correlated) with Fonciere Inea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonciere Inea has no effect on the direction of Altamir SCA i.e., Altamir SCA and Fonciere Inea go up and down completely randomly.

Pair Corralation between Altamir SCA and Fonciere Inea

Assuming the 90 days trading horizon Altamir SCA is expected to under-perform the Fonciere Inea. In addition to that, Altamir SCA is 1.91 times more volatile than Fonciere Inea. It trades about -0.06 of its total potential returns per unit of risk. Fonciere Inea is currently generating about 0.05 per unit of volatility. If you would invest  3,080  in Fonciere Inea on September 7, 2024 and sell it today you would earn a total of  70.00  from holding Fonciere Inea or generate 2.27% return on investment over 90 days.

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

Altamir SCA  vs.  Fonciere Inea

Altamir SCA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fonciere Inea

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fonciere Inea are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fonciere Inea is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Altamir SCA and Fonciere Inea

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

The idea behind Altamir SCA and Fonciere Inea 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.