Correlation Between Atento SA and SMX Public
Can any of the company-specific risk be diversified away by investing in both Atento SA and SMX Public 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 Atento SA and SMX Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atento SA and SMX Public Limited, you can compare the effects of market volatilities on Atento SA and SMX Public 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 Atento SA with a short position of SMX Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atento SA and SMX Public.
Diversification Opportunities for Atento SA and SMX Public
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atento and SMX is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Atento SA and SMX Public Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMX Public Limited and Atento SA 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 Atento SA are associated (or correlated) with SMX Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMX Public Limited has no effect on the direction of Atento SA i.e., Atento SA and SMX Public go up and down completely randomly.
Pair Corralation between Atento SA and SMX Public
Given the investment horizon of 90 days Atento SA is expected to under-perform the SMX Public. But the stock apears to be less risky and, when comparing its historical volatility, Atento SA is 13.27 times less risky than SMX Public. The stock trades about -0.1 of its potential returns per unit of risk. The SMX Public Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 22,330 in SMX Public Limited on August 28, 2024 and sell it today you would lose (22,309) from holding SMX Public Limited or give up 99.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.52% |
| Values | Daily Returns |
Atento SA vs. SMX Public Limited
Performance |
| Timeline |
| Atento SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SMX Public Limited |
Atento SA and SMX Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atento SA and SMX Public
The main advantage of trading using opposite Atento SA and SMX Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atento SA position performs unexpectedly, SMX Public 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 SMX Public will offset losses from the drop in SMX Public's long position.| Atento SA vs. SMX Public Limited | Atento SA vs. System1 | Atento SA vs. Lichen China Limited | Atento SA vs. Eastman Kodak Co |
| SMX Public vs. Team Inc | SMX Public vs. Lichen China Limited | SMX Public vs. System1 | SMX Public vs. Eastman Kodak Co |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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