Correlation Between Altri SGPS and Novabase SGPS

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

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

Diversification Opportunities for Altri SGPS and Novabase SGPS

-0.49

Correlation Coefficient

Altri SGPS  Novabase SGPS

Very good diversification

The 3 months correlation between Altri and Novabase is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Altri SGPS SA and Novabase SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novabase SGPS and Altri SGPS 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 Altri SGPS SA are associated (or correlated) with Novabase SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novabase SGPS has no effect on the direction of Altri SGPS i.e., Altri SGPS and Novabase SGPS go up and down completely randomly.

Pair Corralation between Altri SGPS and Novabase SGPS

Assuming the 90 days trading horizon Altri SGPS SA is expected to under-perform the Novabase SGPS. But the stock apears to be less risky and, when comparing its historical volatility, Altri SGPS SA is 1.27 times less risky than Novabase SGPS. The stock trades about -0.2 of its potential returns per unit of risk. The Novabase SGPS is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  632.00  in Novabase SGPS on April 22, 2025 and sell it today you would earn a total of  148.00  from holding Novabase SGPS or generate 23.42% return on investment over 90 days.

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

Altri SGPS SA  vs.  Novabase SGPS

Altri SGPS SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altri SGPS SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Novabase SGPS

Risk-Adjusted Performance

Good

Over the last 90 days Novabase SGPS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Novabase SGPS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altri SGPS and Novabase SGPS

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

The idea behind Altri SGPS SA and Novabase SGPS 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.