Correlation Between Altareit and Compagnie

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

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

Diversification Opportunities for Altareit and Compagnie

0.73

Correlation Coefficient

Altareit  Compagnie

Poor diversification

The 3 months correlation between Altareit and Compagnie is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Altareit and Compagnie de lOdet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de lOdet and Altareit 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 Altareit are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de lOdet has no effect on the direction of Altareit i.e., Altareit and Compagnie go up and down completely randomly.

Pair Corralation between Altareit and Compagnie

Assuming the 90 days trading horizon Altareit is expected to generate 1.79 times less return on investment than Compagnie. But when comparing it to its historical volatility, Altareit is 2.52 times less risky than Compagnie. It trades about 0.23 of its potential returns per unit of risk. Compagnie de lOdet is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  134,002  in Compagnie de lOdet on April 22, 2025 and sell it today you would earn a total of  13,598  from holding Compagnie de lOdet or generate 10.15% return on investment over 90 days.

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

Altareit  vs.  Compagnie de lOdet

Altareit

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altareit are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Altareit is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Compagnie de lOdet

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie de lOdet are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compagnie may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Altareit and Compagnie

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

The idea behind Altareit and Compagnie de lOdet 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.