Correlation Between ATS and Exchange Traded
Can any of the company-specific risk be diversified away by investing in both ATS and Exchange Traded 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 ATS and Exchange Traded into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATS Corporation and Exchange Traded Concepts, you can compare the effects of market volatilities on ATS and Exchange Traded 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 ATS with a short position of Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATS and Exchange Traded.
Diversification Opportunities for ATS and Exchange Traded
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATS and Exchange is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ATS Corp. and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts and ATS 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 ATS Corporation are associated (or correlated) with Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of ATS i.e., ATS and Exchange Traded go up and down completely randomly.
Pair Corralation between ATS and Exchange Traded
Considering the 90-day investment horizon ATS Corporation is expected to generate 1.57 times more return on investment than Exchange Traded. However, ATS is 1.57 times more volatile than Exchange Traded Concepts. It trades about 0.01 of its potential returns per unit of risk. Exchange Traded Concepts is currently generating about -0.01 per unit of risk. If you would invest 3,260 in ATS Corporation on August 29, 2024 and sell it today you would lose (161.00) from holding ATS Corporation or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.94% |
| Values | Daily Returns |
ATS Corp. vs. Exchange Traded Concepts
Performance |
| Timeline |
| ATS Corporation |
| Exchange Traded Concepts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
ATS and Exchange Traded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATS and Exchange Traded
The main advantage of trading using opposite ATS and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATS position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded's long position.The idea behind ATS Corporation and Exchange Traded Concepts 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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