Correlation Between Altus Property and Swift Foods

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

By analyzing existing cross correlation between Altus Property Ventures and Swift Foods, you can compare the effects of market volatilities on Altus Property and Swift Foods 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 Altus Property with a short position of Swift Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Property and Swift Foods.

Diversification Opportunities for Altus Property and Swift Foods

0.03

Correlation Coefficient

Altus Property  Swift Foods

Significant diversification

The 3 months correlation between Altus and Swift is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Altus Property Ventures and Swift Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swift Foods and Altus Property 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 Altus Property Ventures are associated (or correlated) with Swift Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swift Foods has no effect on the direction of Altus Property i.e., Altus Property and Swift Foods go up and down completely randomly.

Pair Corralation between Altus Property and Swift Foods

Assuming the 90 days trading horizon Altus Property Ventures is expected to under-perform the Swift Foods. But the stock apears to be less risky and, when comparing its historical volatility, Altus Property Ventures is 1.56 times less risky than Swift Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Swift Foods is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  6.10  in Swift Foods on September 1, 2024 and sell it today you would lose (0.30) from holding Swift Foods or give up 4.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.44%
Values	Daily Returns

Altus Property Ventures  vs.  Swift Foods

Altus Property Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altus Property Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Altus Property is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Swift Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swift Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Swift Foods is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Altus Property and Swift Foods

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

The idea behind Altus Property Ventures and Swift Foods 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.