Correlation Between Atec and FOODWELL
Can any of the company-specific risk be diversified away by investing in both Atec and FOODWELL 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 Atec and FOODWELL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atec Co and FOODWELL Co, you can compare the effects of market volatilities on Atec and FOODWELL 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 Atec with a short position of FOODWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atec and FOODWELL.
Diversification Opportunities for Atec and FOODWELL
Good diversification
The 3 months correlation between Atec and FOODWELL is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Atec Co and FOODWELL Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOODWELL and Atec 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 Atec Co are associated (or correlated) with FOODWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOODWELL has no effect on the direction of Atec i.e., Atec and FOODWELL go up and down completely randomly.
Pair Corralation between Atec and FOODWELL
Assuming the 90 days trading horizon Atec Co is expected to under-perform the FOODWELL. In addition to that, Atec is 4.62 times more volatile than FOODWELL Co. It trades about -0.06 of its total potential returns per unit of risk. FOODWELL Co is currently generating about -0.09 per unit of volatility. If you would invest 520,000 in FOODWELL Co on September 2, 2024 and sell it today you would lose (21,000) from holding FOODWELL Co or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atec Co vs. FOODWELL Co
Performance |
| Timeline |
| Atec |
| FOODWELL |
Atec and FOODWELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atec and FOODWELL
The main advantage of trading using opposite Atec and FOODWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atec position performs unexpectedly, FOODWELL 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 FOODWELL will offset losses from the drop in FOODWELL's long position.| Atec vs. Daechang Steel Co | Atec vs. Dongil Steel Co | Atec vs. Finebesteel | Atec vs. Hyundai Engineering Plastics |
| FOODWELL vs. Korea Real Estate | FOODWELL vs. Korea Ratings Co | FOODWELL vs. IQuest Co | FOODWELL vs. Wonbang Tech 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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