Correlation Between CoStar and Alta Global

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

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

Diversification Opportunities for CoStar and Alta Global

0.62

Correlation Coefficient

CoStar  Alta Global

Poor diversification

The 3 months correlation between CoStar and Alta is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CoStar Group and Alta Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Global Group and CoStar 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 CoStar Group are associated (or correlated) with Alta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Global Group has no effect on the direction of CoStar i.e., CoStar and Alta Global go up and down completely randomly.

Pair Corralation between CoStar and Alta Global

Given the investment horizon of 90 days CoStar is expected to generate 1.74 times less return on investment than Alta Global. But when comparing it to its historical volatility, CoStar Group is 4.26 times less risky than Alta Global. It trades about 0.25 of its potential returns per unit of risk. Alta Global Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  86.00  in Alta Global Group on April 30, 2025 and sell it today you would earn a total of  29.00  from holding Alta Global Group or generate 33.72% return on investment over 90 days.

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

CoStar Group  vs.  Alta Global Group

CoStar Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CoStar Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, CoStar reported solid returns over the last few months and may actually be approaching a breakup point.

Alta Global Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alta Global Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady primary indicators, Alta Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CoStar and Alta Global

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

The idea behind CoStar Group and Alta Global Group 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.