Correlation Between Synergie and Alten SA

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

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

Diversification Opportunities for Synergie and Alten SA

0.78

Correlation Coefficient

Synergie  Alten SA

Poor diversification

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

Pair Corralation between Synergie and Alten SA

Assuming the 90 days trading horizon Synergie SE is expected to generate 0.88 times more return on investment than Alten SA. However, Synergie SE is 1.13 times less risky than Alten SA. It trades about -0.02 of its potential returns per unit of risk. Alten SA is currently generating about -0.16 per unit of risk. 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

Synergie SE  vs.  Alten SA

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.

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.

Pair Trading with Synergie and Alten SA

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

The idea behind Synergie SE and Alten 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.