Correlation Between ATA Creativity and Vitru
Can any of the company-specific risk be diversified away by investing in both ATA Creativity and Vitru 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 ATA Creativity and Vitru into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATA Creativity Global and Vitru, you can compare the effects of market volatilities on ATA Creativity and Vitru 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 ATA Creativity with a short position of Vitru. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATA Creativity and Vitru.
Diversification Opportunities for ATA Creativity and Vitru
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ATA and Vitru is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding ATA Creativity Global and Vitru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitru and ATA Creativity 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 ATA Creativity Global are associated (or correlated) with Vitru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitru has no effect on the direction of ATA Creativity i.e., ATA Creativity and Vitru go up and down completely randomly.
Pair Corralation between ATA Creativity and Vitru
Given the investment horizon of 90 days ATA Creativity Global is expected to generate 1.29 times more return on investment than Vitru. However, ATA Creativity is 1.29 times more volatile than Vitru. It trades about -0.01 of its potential returns per unit of risk. Vitru is currently generating about -0.07 per unit of risk. If you would invest 191.00 in ATA Creativity Global on August 24, 2024 and sell it today you would lose (89.00) from holding ATA Creativity Global or give up 46.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 18.8% |
| Values | Daily Returns |
ATA Creativity Global vs. Vitru
Performance |
| Timeline |
| ATA Creativity Global |
| Vitru |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ATA Creativity and Vitru Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATA Creativity and Vitru
The main advantage of trading using opposite ATA Creativity and Vitru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATA Creativity position performs unexpectedly, Vitru 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 Vitru will offset losses from the drop in Vitru's long position.| ATA Creativity vs. Universal Technical Institute | ATA Creativity vs. Cogna Educacao SA | ATA Creativity vs. Sunlands Technology Group | ATA Creativity vs. American Public Education |
| Vitru vs. Universal Technical Institute | Vitru vs. ATA Creativity Global | Vitru vs. Cogna Educacao SA | Vitru vs. Sunlands Technology Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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