Correlation Between StarTek and Alithya

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

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

Diversification Opportunities for StarTek and Alithya

0.5

Correlation Coefficient

StarTek  Alithya

Very weak diversification

The 3 months correlation between StarTek and Alithya is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding StarTek and Alithya Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alithya Group and StarTek 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 StarTek are associated (or correlated) with Alithya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alithya Group has no effect on the direction of StarTek i.e., StarTek and Alithya go up and down completely randomly.

Pair Corralation between StarTek and Alithya

If you would invest  184.00  in Alithya Group on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Alithya Group or generate 0.0% return on investment over 90 days.

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

StarTek  vs.  Alithya Group

StarTek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days StarTek has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, StarTek is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Alithya Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with StarTek and Alithya

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

The idea behind StarTek and Alithya Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.