Correlation Between Atos SE and Soitec SA
Can any of the company-specific risk be diversified away by investing in both Atos SE and Soitec 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 Soitec 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 Soitec SA, you can compare the effects of market volatilities on Atos SE and Soitec 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 Soitec SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atos SE and Soitec SA.
Diversification Opportunities for Atos SE and Soitec SA
Very good diversification
The 3 months correlation between Atos and Soitec is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Atos SE and Soitec SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soitec 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 Soitec SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soitec SA has no effect on the direction of Atos SE i.e., Atos SE and Soitec SA go up and down completely randomly.
Pair Corralation between Atos SE and Soitec SA
Assuming the 90 days trading horizon Atos SE is expected to generate 24.15 times more return on investment than Soitec SA. However, Atos SE is 24.15 times more volatile than Soitec SA. It trades about 0.07 of its potential returns per unit of risk. Soitec SA is currently generating about -0.03 per unit of risk. If you would invest 1.47 in Atos SE on October 25, 2024 and sell it today you would lose (1.26) from holding Atos SE or give up 85.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atos SE vs. Soitec SA
Performance |
| Timeline |
| Atos SE |
| Soitec SA |
Atos SE and Soitec SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atos SE and Soitec SA
The main advantage of trading using opposite Atos SE and Soitec SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atos SE position performs unexpectedly, Soitec 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 Soitec SA will offset losses from the drop in Soitec SA's long position.The idea behind Atos SE and Soitec 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.| Soitec SA vs. Vallourec | Soitec SA vs. Dassault Systemes SE | Soitec SA vs. Teleperformance SE | Soitec SA vs. Atos SE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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