Correlation Between ATMA Participaes and Cable One
Can any of the company-specific risk be diversified away by investing in both ATMA Participaes and Cable One 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 Cable One 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 Cable One, you can compare the effects of market volatilities on ATMA Participaes and Cable One 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 Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATMA Participaes and Cable One.
Diversification Opportunities for ATMA Participaes and Cable One
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between ATMA and Cable is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One 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 Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and Cable One go up and down completely randomly.
Pair Corralation between ATMA Participaes and Cable One
Assuming the 90 days trading horizon ATMA Participaes SA is expected to generate 0.98 times more return on investment than Cable One. However, ATMA Participaes SA is 1.02 times less risky than Cable One. It trades about -0.09 of its potential returns per unit of risk. Cable One is currently generating about -0.26 per unit of risk. If you would invest 122.00 in ATMA Participaes SA on November 2, 2024 and sell it today you would lose (10.00) from holding ATMA Participaes SA or give up 8.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATMA Participaes SA vs. Cable One
Performance |
| Timeline |
| ATMA Participaes |
| Cable One |
ATMA Participaes and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATMA Participaes and Cable One
The main advantage of trading using opposite ATMA Participaes and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATMA Participaes position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| ATMA Participaes vs. Triunfo Participaes e | ATMA Participaes vs. Allpark Empreendimentos Participaes | ATMA Participaes vs. Azevedo Travassos SA | ATMA Participaes vs. Azevedo Travassos SA |
| Cable One vs. United Rentals | Cable One vs. New Oriental Education | Cable One vs. Air Products and | Cable One vs. Waste Management |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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