Correlation Between Atlantis and Bank Millennium

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Can any of the company-specific risk be diversified away by investing in both Atlantis and Bank Millennium 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 Atlantis and Bank Millennium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantis SA and Bank Millennium SA, you can compare the effects of market volatilities on Atlantis and Bank Millennium 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 Atlantis with a short position of Bank Millennium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantis and Bank Millennium.

Diversification Opportunities for Atlantis and Bank Millennium

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Atlantis and Bank is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Atlantis SA and Bank Millennium SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Millennium SA and Atlantis 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 Atlantis SA are associated (or correlated) with Bank Millennium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Millennium SA has no effect on the direction of Atlantis i.e., Atlantis and Bank Millennium go up and down completely randomly.

Pair Corralation between Atlantis and Bank Millennium

Assuming the 90 days trading horizon Atlantis SA is expected to generate 2.43 times more return on investment than Bank Millennium. However, Atlantis is 2.43 times more volatile than Bank Millennium SA. It trades about 0.37 of its potential returns per unit of risk. Bank Millennium SA is currently generating about 0.21 per unit of risk. If you would invest  8.57  in Atlantis SA on October 26, 2024 and sell it today you would earn a total of  15.43  from holding Atlantis SA or generate 180.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Atlantis SA  vs.  Bank Millennium SA

 Performance 
       Timeline  
Atlantis SA 

Risk-Adjusted Performance

29 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Atlantis SA are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Atlantis reported solid returns over the last few months and may actually be approaching a breakup point.
Bank Millennium SA 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Bank Millennium SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bank Millennium reported solid returns over the last few months and may actually be approaching a breakup point.

Atlantis and Bank Millennium Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Atlantis and Bank Millennium

The main advantage of trading using opposite Atlantis and Bank Millennium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantis position performs unexpectedly, Bank Millennium 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 Bank Millennium will offset losses from the drop in Bank Millennium's long position.
The idea behind Atlantis SA and Bank Millennium 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.
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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