Correlation Between Atos SE and Enagas SA
Can any of the company-specific risk be diversified away by investing in both Atos SE and Enagas SA 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 Atos SE and Enagas SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atos SE and Enagas SA, you can compare the effects of market volatilities on Atos SE and Enagas SA 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 Atos SE with a short position of Enagas SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atos SE and Enagas SA.
Diversification Opportunities for Atos SE and Enagas SA
Poor diversification
The 3 months correlation between Atos and Enagas is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Atos SE and Enagas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enagas SA and Atos SE 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 Atos SE are associated (or correlated) with Enagas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enagas SA has no effect on the direction of Atos SE i.e., Atos SE and Enagas SA go up and down completely randomly.
Pair Corralation between Atos SE and Enagas SA
Assuming the 90 days horizon Atos SE is expected to generate 253.2 times more return on investment than Enagas SA. However, Atos SE is 253.2 times more volatile than Enagas SA. It trades about 0.36 of its potential returns per unit of risk. Enagas SA is currently generating about -0.02 per unit of risk. If you would invest 11.00 in Atos SE on November 8, 2024 and sell it today you would lose (10.74) from holding Atos SE or give up 97.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atos SE vs. Enagas SA
Performance |
| Timeline |
| Atos SE |
| Enagas SA |
Atos SE and Enagas SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atos SE and Enagas SA
The main advantage of trading using opposite Atos SE and Enagas SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atos SE position performs unexpectedly, Enagas SA 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 Enagas SA will offset losses from the drop in Enagas SA's long position.| Atos SE vs. Deveron Corp | Atos SE vs. Appen Limited | Atos SE vs. Atos Origin SA | Atos SE vs. Appen Limited |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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