Correlation Between ATMA Participaes and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both ATMA Participaes and Alibaba Group 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 ATMA Participaes and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATMA Participaes SA and Alibaba Group Holding, you can compare the effects of market volatilities on ATMA Participaes and Alibaba Group 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 ATMA Participaes with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATMA Participaes and Alibaba Group.
Diversification Opportunities for ATMA Participaes and Alibaba Group
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ATMA and Alibaba is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding and ATMA Participaes 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 ATMA Participaes SA are associated (or correlated) with Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and Alibaba Group go up and down completely randomly.
Pair Corralation between ATMA Participaes and Alibaba Group
Assuming the 90 days trading horizon ATMA Participaes SA is expected to under-perform the Alibaba Group. But the stock apears to be less risky and, when comparing its historical volatility, ATMA Participaes SA is 1.12 times less risky than Alibaba Group. The stock trades about -0.11 of its potential returns per unit of risk. The Alibaba Group Holding is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,870 in Alibaba Group Holding on August 26, 2024 and sell it today you would lose (145.00) from holding Alibaba Group Holding or give up 7.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATMA Participaes SA vs. Alibaba Group Holding
Performance |
| Timeline |
| ATMA Participaes |
| Alibaba Group Holding |
ATMA Participaes and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATMA Participaes and Alibaba Group
The main advantage of trading using opposite ATMA Participaes and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATMA Participaes position performs unexpectedly, Alibaba Group 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 Alibaba Group will offset losses from the drop in Alibaba Group's long position.| ATMA Participaes vs. Mliuz SA | ATMA Participaes vs. Lojas Quero Quero SA | ATMA Participaes vs. Grupo SBF SA | ATMA Participaes vs. Enjoei SA |
| Alibaba Group vs. Southwest Airlines Co | Alibaba Group vs. Hospital Mater Dei | Alibaba Group vs. Extra Space Storage | Alibaba Group vs. Apartment Investment and |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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