Correlation Between Aterian and Applied UV
Can any of the company-specific risk be diversified away by investing in both Aterian and Applied UV 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 Aterian and Applied UV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aterian and Applied UV, you can compare the effects of market volatilities on Aterian and Applied UV 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 Aterian with a short position of Applied UV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aterian and Applied UV.
Diversification Opportunities for Aterian and Applied UV
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aterian and Applied is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and Applied UV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied UV and Aterian 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 Aterian are associated (or correlated) with Applied UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied UV has no effect on the direction of Aterian i.e., Aterian and Applied UV go up and down completely randomly.
Pair Corralation between Aterian and Applied UV
Given the investment horizon of 90 days Aterian is expected to generate 0.54 times more return on investment than Applied UV. However, Aterian is 1.86 times less risky than Applied UV. It trades about -0.04 of its potential returns per unit of risk. Applied UV is currently generating about -0.17 per unit of risk. If you would invest 1,488 in Aterian on October 9, 2024 and sell it today you would lose (1,234) from holding Aterian or give up 82.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.98% |
| Values | Daily Returns |
Aterian vs. Applied UV
Performance |
| Timeline |
| Aterian |
| Applied UV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aterian and Applied UV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aterian and Applied UV
The main advantage of trading using opposite Aterian and Applied UV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aterian position performs unexpectedly, Applied UV 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 Applied UV will offset losses from the drop in Applied UV's long position.The idea behind Aterian and Applied UV 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.| Applied UV vs. FGI Industries | Applied UV vs. Aterian | Applied UV vs. Energy Focu | Applied UV vs. MasterBrand |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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