Correlation Between BGF Retail and ATON
Can any of the company-specific risk be diversified away by investing in both BGF Retail and ATON 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 BGF Retail and ATON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and ATON Inc, you can compare the effects of market volatilities on BGF Retail and ATON 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 BGF Retail with a short position of ATON. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and ATON.
Diversification Opportunities for BGF Retail and ATON
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BGF and ATON is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and ATON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATON Inc and BGF Retail 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 BGF Retail Co are associated (or correlated) with ATON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATON Inc has no effect on the direction of BGF Retail i.e., BGF Retail and ATON go up and down completely randomly.
Pair Corralation between BGF Retail and ATON
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the ATON. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 3.93 times less risky than ATON. The stock trades about -0.12 of its potential returns per unit of risk. The ATON Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 398,000 in ATON Inc on September 13, 2024 and sell it today you would earn a total of 182,000 from holding ATON Inc or generate 45.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. ATON Inc
Performance |
| Timeline |
| BGF Retail |
| ATON Inc |
BGF Retail and ATON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and ATON
The main advantage of trading using opposite BGF Retail and ATON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, ATON 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 ATON will offset losses from the drop in ATON's long position.| BGF Retail vs. Korea New Network | BGF Retail vs. ICD Co | BGF Retail vs. DYPNF CoLtd | BGF Retail vs. Solution Advanced Technology |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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