Correlation Between Altaba and Investor

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Can any of the company-specific risk be diversified away by investing in both Altaba and Investor 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 Altaba and Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altaba Inc and Investor AB, you can compare the effects of market volatilities on Altaba and Investor 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 Altaba with a short position of Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altaba and Investor.

Diversification Opportunities for Altaba and Investor

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Altaba and Investor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Altaba Inc and Investor AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB and Altaba 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 Altaba Inc are associated (or correlated) with Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB has no effect on the direction of Altaba i.e., Altaba and Investor go up and down completely randomly.

Pair Corralation between Altaba and Investor

If you would invest  2,375  in Investor AB on December 30, 2023 and sell it today you would earn a total of  120.00  from holding Investor AB or generate 5.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Altaba Inc  vs.  Investor AB

 Performance 
       Timeline  
Altaba Inc 

Risk-Adjusted Performance

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Over the last 90 days Altaba Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Altaba is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Investor AB 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Investor AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Investor may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Altaba and Investor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altaba and Investor

The main advantage of trading using opposite Altaba and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altaba position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.
The idea behind Altaba Inc and Investor AB 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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