Correlation Between Alpha Trust and Optronics Technologies

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

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

Diversification Opportunities for Alpha Trust and Optronics Technologies

0.54

Correlation Coefficient

Alpha Trust  Optronics Technologies

Very weak diversification

The 3 months correlation between Alpha and Optronics is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Trust Andromeda and Optronics Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optronics Technologies and Alpha Trust 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 Alpha Trust Andromeda are associated (or correlated) with Optronics Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optronics Technologies has no effect on the direction of Alpha Trust i.e., Alpha Trust and Optronics Technologies go up and down completely randomly.

Pair Corralation between Alpha Trust and Optronics Technologies

Assuming the 90 days trading horizon Alpha Trust is expected to generate 5.0 times less return on investment than Optronics Technologies. But when comparing it to its historical volatility, Alpha Trust Andromeda is 3.62 times less risky than Optronics Technologies. It trades about 0.17 of its potential returns per unit of risk. Optronics Technologies SA is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  192.00  in Optronics Technologies SA on May 18, 2025 and sell it today you would earn a total of  106.00  from holding Optronics Technologies SA or generate 55.21% return on investment over 90 days.

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

Alpha Trust Andromeda  vs.  Optronics Technologies SA

Alpha Trust Andromeda

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Trust Andromeda are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Alpha Trust may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Optronics Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Optronics Technologies SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Optronics Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Trust and Optronics Technologies

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

The idea behind Alpha Trust Andromeda and Optronics Technologies 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.