Correlation Between Alfa Financial and Pets At

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

By analyzing existing cross correlation between Alfa Financial Software and Pets at Home, you can compare the effects of market volatilities on Alfa Financial and Pets At 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 Alfa Financial with a short position of Pets At. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Pets At.

Diversification Opportunities for Alfa Financial and Pets At

0.65

Correlation Coefficient

Alfa Financial  Pets At

Poor diversification

The 3 months correlation between Alfa and Pets is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Pets at Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pets at Home and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with Pets At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pets at Home has no effect on the direction of Alfa Financial i.e., Alfa Financial and Pets At go up and down completely randomly.

Pair Corralation between Alfa Financial and Pets At

Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 1.16 times more return on investment than Pets At. However, Alfa Financial is 1.16 times more volatile than Pets at Home. It trades about 0.1 of its potential returns per unit of risk. Pets at Home is currently generating about 0.1 per unit of risk. If you would invest  20,308  in Alfa Financial Software on April 20, 2025 and sell it today you would earn a total of  1,942  from holding Alfa Financial Software or generate 9.56% return on investment over 90 days.

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

Alfa Financial Software  vs.  Pets at Home

Alfa Financial Software

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alfa Financial Software are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alfa Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pets at Home

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pets at Home are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Pets At may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Alfa Financial and Pets At

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

The idea behind Alfa Financial Software and Pets at Home 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.