Correlation Between Aterian and Phunware
Can any of the company-specific risk be diversified away by investing in both Aterian and Phunware 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 Phunware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aterian and Phunware, you can compare the effects of market volatilities on Aterian and Phunware 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 Phunware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aterian and Phunware.
Diversification Opportunities for Aterian and Phunware
Very good diversification
The 3 months correlation between Aterian and Phunware is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and Phunware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phunware 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 Phunware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phunware has no effect on the direction of Aterian i.e., Aterian and Phunware go up and down completely randomly.
Pair Corralation between Aterian and Phunware
Given the investment horizon of 90 days Aterian is expected to generate 0.38 times more return on investment than Phunware. However, Aterian is 2.61 times less risky than Phunware. It trades about -0.02 of its potential returns per unit of risk. Phunware is currently generating about -0.38 per unit of risk. If you would invest 269.00 in Aterian on August 28, 2024 and sell it today you would lose (7.00) from holding Aterian or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aterian vs. Phunware
Performance |
| Timeline |
| Aterian |
| Phunware |
Aterian and Phunware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aterian and Phunware
The main advantage of trading using opposite Aterian and Phunware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aterian position performs unexpectedly, Phunware 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 Phunware will offset losses from the drop in Phunware's long position.The idea behind Aterian and Phunware 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.| Phunware vs. HeartCore Enterprises | Phunware vs. Beamr Imaging Ltd | Phunware vs. AMTD Digital | Phunware vs. CXApp Inc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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