Correlation Between ATMA Participaes and Gen Digital
Can any of the company-specific risk be diversified away by investing in both ATMA Participaes and Gen Digital 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 Gen Digital 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 Gen Digital, you can compare the effects of market volatilities on ATMA Participaes and Gen Digital 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 Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATMA Participaes and Gen Digital.
Diversification Opportunities for ATMA Participaes and Gen Digital
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATMA and Gen is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital 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 Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and Gen Digital go up and down completely randomly.
Pair Corralation between ATMA Participaes and Gen Digital
Assuming the 90 days trading horizon ATMA Participaes SA is expected to under-perform the Gen Digital. In addition to that, ATMA Participaes is 3.5 times more volatile than Gen Digital. It trades about -0.09 of its total potential returns per unit of risk. Gen Digital is currently generating about -0.22 per unit of volatility. If you would invest 17,893 in Gen Digital on November 2, 2024 and sell it today you would lose (893.00) from holding Gen Digital or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATMA Participaes SA vs. Gen Digital
Performance |
| Timeline |
| ATMA Participaes |
| Gen Digital |
ATMA Participaes and Gen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATMA Participaes and Gen Digital
The main advantage of trading using opposite ATMA Participaes and Gen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATMA Participaes position performs unexpectedly, Gen Digital 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 Gen Digital will offset losses from the drop in Gen Digital'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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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