Correlation Between Atec and Digital Power
Can any of the company-specific risk be diversified away by investing in both Atec and Digital Power 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 Digital Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atec Co and Digital Power Communications, you can compare the effects of market volatilities on Atec and Digital Power 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 Digital Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atec and Digital Power.
Diversification Opportunities for Atec and Digital Power
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atec and Digital is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Atec Co and Digital Power Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Power Commun 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 Digital Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Power Commun has no effect on the direction of Atec i.e., Atec and Digital Power go up and down completely randomly.
Pair Corralation between Atec and Digital Power
Assuming the 90 days trading horizon Atec Co is expected to generate 2.18 times more return on investment than Digital Power. However, Atec is 2.18 times more volatile than Digital Power Communications. It trades about 0.08 of its potential returns per unit of risk. Digital Power Communications is currently generating about 0.05 per unit of risk. If you would invest 840,831 in Atec Co on December 4, 2024 and sell it today you would earn a total of 2,284,169 from holding Atec Co or generate 271.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Atec Co vs. Digital Power Communications
Performance |
| Timeline |
| Atec |
| Digital Power Commun |
Atec and Digital Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atec and Digital Power
The main advantage of trading using opposite Atec and Digital Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atec position performs unexpectedly, Digital Power 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 Digital Power will offset losses from the drop in Digital Power's long position.| Atec vs. SEOJEON ELECTRIC MACHINERY | Atec vs. Keyang Electric Machinery | Atec vs. Hwacheon Machinery Co | Atec vs. Sam Yang Foods |
| Digital Power vs. Puloon Technology | Digital Power vs. DB Financial Investment | Digital Power vs. Adaptive Plasma Technology | Digital Power vs. Lotte Non Life Insurance |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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