Correlation Between Squirrel Media and Altia Consultores

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

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

Diversification Opportunities for Squirrel Media and Altia Consultores

0.14

Correlation Coefficient

Squirrel Media  Altia Consultores

Average diversification

The 3 months correlation between Squirrel and Altia is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Squirrel Media SA and Altia Consultores SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Consultores and Squirrel Media 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 Squirrel Media SA are associated (or correlated) with Altia Consultores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Consultores has no effect on the direction of Squirrel Media i.e., Squirrel Media and Altia Consultores go up and down completely randomly.

Pair Corralation between Squirrel Media and Altia Consultores

Assuming the 90 days trading horizon Squirrel Media SA is expected to under-perform the Altia Consultores. But the stock apears to be less risky and, when comparing its historical volatility, Squirrel Media SA is 1.49 times less risky than Altia Consultores. The stock trades about -0.14 of its potential returns per unit of risk. The Altia Consultores SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  446.00  in Altia Consultores SA on September 12, 2024 and sell it today you would earn a total of  4.00  from holding Altia Consultores SA or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Squirrel Media SA  vs.  Altia Consultores SA

Squirrel Media SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Squirrel Media SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Altia Consultores

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altia Consultores SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Altia Consultores is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Squirrel Media and Altia Consultores

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

The idea behind Squirrel Media SA and Altia Consultores 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.