Correlation Between Atinum Investment and DRGEM
Can any of the company-specific risk be diversified away by investing in both Atinum Investment and DRGEM 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 Atinum Investment and DRGEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atinum Investment Co and DRGEM, you can compare the effects of market volatilities on Atinum Investment and DRGEM 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 Atinum Investment with a short position of DRGEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atinum Investment and DRGEM.
Diversification Opportunities for Atinum Investment and DRGEM
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atinum and DRGEM is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Atinum Investment Co and DRGEM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRGEM and Atinum Investment 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 Atinum Investment Co are associated (or correlated) with DRGEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRGEM has no effect on the direction of Atinum Investment i.e., Atinum Investment and DRGEM go up and down completely randomly.
Pair Corralation between Atinum Investment and DRGEM
Assuming the 90 days trading horizon Atinum Investment Co is expected to generate 1.8 times more return on investment than DRGEM. However, Atinum Investment is 1.8 times more volatile than DRGEM. It trades about 0.0 of its potential returns per unit of risk. DRGEM is currently generating about -0.11 per unit of risk. If you would invest 266,540 in Atinum Investment Co on September 4, 2024 and sell it today you would lose (29,540) from holding Atinum Investment Co or give up 11.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atinum Investment Co vs. DRGEM
Performance |
| Timeline |
| Atinum Investment |
| DRGEM |
Atinum Investment and DRGEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atinum Investment and DRGEM
The main advantage of trading using opposite Atinum Investment and DRGEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atinum Investment position performs unexpectedly, DRGEM 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 DRGEM will offset losses from the drop in DRGEM's long position.| Atinum Investment vs. Hana Financial | Atinum Investment vs. Samsung Life Insurance | Atinum Investment vs. Handok Clean Tech | Atinum Investment vs. Jeju Bank |
| DRGEM vs. Seah Steel Corp | DRGEM vs. Dongbang Ship Machinery | DRGEM vs. Nam Hwa Construction | DRGEM vs. Sempio Foods Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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