Correlation Between Atos SE and Cegedim SA
Can any of the company-specific risk be diversified away by investing in both Atos SE and Cegedim SA 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 Atos SE and Cegedim SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atos SE and Cegedim SA, you can compare the effects of market volatilities on Atos SE and Cegedim SA 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 Atos SE with a short position of Cegedim SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atos SE and Cegedim SA.
Diversification Opportunities for Atos SE and Cegedim SA
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atos and Cegedim is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Atos SE and Cegedim SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cegedim SA and Atos SE 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 Atos SE are associated (or correlated) with Cegedim SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cegedim SA has no effect on the direction of Atos SE i.e., Atos SE and Cegedim SA go up and down completely randomly.
Pair Corralation between Atos SE and Cegedim SA
Assuming the 90 days trading horizon Atos SE is expected to generate 55.78 times more return on investment than Cegedim SA. However, Atos SE is 55.78 times more volatile than Cegedim SA. It trades about 0.1 of its potential returns per unit of risk. Cegedim SA is currently generating about -0.12 per unit of risk. If you would invest 1.01 in Atos SE on September 1, 2024 and sell it today you would earn a total of 88.99 from holding Atos SE or generate 8810.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atos SE vs. Cegedim SA
Performance |
| Timeline |
| Atos SE |
| Cegedim SA |
Atos SE and Cegedim SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atos SE and Cegedim SA
The main advantage of trading using opposite Atos SE and Cegedim SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atos SE position performs unexpectedly, Cegedim SA 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 Cegedim SA will offset losses from the drop in Cegedim SA's long position.The idea behind Atos SE and Cegedim SA 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.| Cegedim SA vs. Bonduelle SCA | Cegedim SA vs. Boiron SA | Cegedim SA vs. Assystem SA | Cegedim SA vs. Lectra SA |
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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