Correlation Between ATEME SA and Melexis NV
Can any of the company-specific risk be diversified away by investing in both ATEME SA and Melexis NV 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 ATEME SA and Melexis NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATEME SA and Melexis NV, you can compare the effects of market volatilities on ATEME SA and Melexis NV 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 ATEME SA with a short position of Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATEME SA and Melexis NV.
Diversification Opportunities for ATEME SA and Melexis NV
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATEME and Melexis is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ATEME SA and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV and ATEME SA 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 ATEME SA are associated (or correlated) with Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of ATEME SA i.e., ATEME SA and Melexis NV go up and down completely randomly.
Pair Corralation between ATEME SA and Melexis NV
Assuming the 90 days trading horizon ATEME SA is expected to generate 2.2 times more return on investment than Melexis NV. However, ATEME SA is 2.2 times more volatile than Melexis NV. It trades about 0.24 of its potential returns per unit of risk. Melexis NV is currently generating about -0.18 per unit of risk. If you would invest 446.00 in ATEME SA on September 5, 2024 and sell it today you would earn a total of 102.00 from holding ATEME SA or generate 22.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATEME SA vs. Melexis NV
Performance |
| Timeline |
| ATEME SA |
| Melexis NV |
ATEME SA and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATEME SA and Melexis NV
The main advantage of trading using opposite ATEME SA and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATEME SA position performs unexpectedly, Melexis NV 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 Melexis NV will offset losses from the drop in Melexis NV's long position.| ATEME SA vs. Melexis NV | ATEME SA vs. ageas SANV | ATEME SA vs. Sofina Socit Anonyme | ATEME SA vs. Barco NV |
| Melexis NV vs. Ackermans Van Haaren | Melexis NV vs. Sofina Socit Anonyme | Melexis NV vs. ageas SANV | Melexis NV vs. Barco NV |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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