Correlation Between Atec and Integral
Can any of the company-specific risk be diversified away by investing in both Atec and Integral 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 Integral into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atec Inc and Integral Ad Science, you can compare the effects of market volatilities on Atec and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atec and Integral.
Diversification Opportunities for Atec and Integral
Good diversification
The 3 months correlation between Atec and Integral is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Atec Inc and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Inc are associated (or correlated) with Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Atec i.e., Atec and Integral go up and down completely randomly.
Pair Corralation between Atec and Integral
Given the investment horizon of 90 days Atec is expected to generate 1.34 times less return on investment than Integral. But when comparing it to its historical volatility, Atec Inc is 2.15 times less risky than Integral. It trades about 0.05 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 936.00 in Integral Ad Science on September 4, 2024 and sell it today you would earn a total of 218.00 from holding Integral Ad Science or generate 23.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atec Inc vs. Integral Ad Science
Performance |
| Timeline |
| Atec Inc |
| Integral Ad Science |
Atec and Integral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atec and Integral
The main advantage of trading using opposite Atec and Integral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atec position performs unexpectedly, Integral 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 Integral will offset losses from the drop in Integral's long position.The idea behind Atec Inc and Integral Ad Science pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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