Correlation Between Alior Bank and Datawalk

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

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

Diversification Opportunities for Alior Bank and Datawalk

-0.14

Correlation Coefficient

Alior Bank  Datawalk

Good diversification

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

Pair Corralation between Alior Bank and Datawalk

Assuming the 90 days trading horizon Alior Bank SA is expected to under-perform the Datawalk. But the stock apears to be less risky and, when comparing its historical volatility, Alior Bank SA is 1.92 times less risky than Datawalk. The stock trades about -0.02 of its potential returns per unit of risk. The Datawalk SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  8,320  in Datawalk SA on April 24, 2025 and sell it today you would earn a total of  2,980  from holding Datawalk SA or generate 35.82% return on investment over 90 days.

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

Alior Bank SA  vs.  Datawalk SA

Alior Bank SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alior Bank SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Alior Bank is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Datawalk SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datawalk SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Datawalk reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alior Bank and Datawalk

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

The idea behind Alior Bank SA and Datawalk 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.