Correlation Between ATMA Participaes and Companhia Habitasul
Can any of the company-specific risk be diversified away by investing in both ATMA Participaes and Companhia Habitasul 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 Companhia Habitasul 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 Companhia Habitasul de, you can compare the effects of market volatilities on ATMA Participaes and Companhia Habitasul 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 Companhia Habitasul. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATMA Participaes and Companhia Habitasul.
Diversification Opportunities for ATMA Participaes and Companhia Habitasul
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ATMA and Companhia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and Companhia Habitasul de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Habitasul 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 Companhia Habitasul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Habitasul has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and Companhia Habitasul go up and down completely randomly.
Pair Corralation between ATMA Participaes and Companhia Habitasul
Assuming the 90 days trading horizon ATMA Participaes SA is expected to under-perform the Companhia Habitasul. But the stock apears to be less risky and, when comparing its historical volatility, ATMA Participaes SA is 1.12 times less risky than Companhia Habitasul. The stock trades about -0.11 of its potential returns per unit of risk. The Companhia Habitasul de is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 3,200 in Companhia Habitasul de on August 24, 2024 and sell it today you would lose (110.00) from holding Companhia Habitasul de or give up 3.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATMA Participaes SA vs. Companhia Habitasul de
Performance |
| Timeline |
| ATMA Participaes |
| Companhia Habitasul |
ATMA Participaes and Companhia Habitasul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATMA Participaes and Companhia Habitasul
The main advantage of trading using opposite ATMA Participaes and Companhia Habitasul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATMA Participaes position performs unexpectedly, Companhia Habitasul 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 Companhia Habitasul will offset losses from the drop in Companhia Habitasul'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 |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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