Correlation Between Biomm SA and Atom Empreendimentos
Can any of the company-specific risk be diversified away by investing in both Biomm SA and Atom Empreendimentos 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 Biomm SA and Atom Empreendimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomm SA and Atom Empreendimentos e, you can compare the effects of market volatilities on Biomm SA and Atom Empreendimentos 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 Biomm SA with a short position of Atom Empreendimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomm SA and Atom Empreendimentos.
Diversification Opportunities for Biomm SA and Atom Empreendimentos
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biomm and Atom is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Biomm SA and Atom Empreendimentos e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atom Empreendimentos and Biomm 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 Biomm SA are associated (or correlated) with Atom Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atom Empreendimentos has no effect on the direction of Biomm SA i.e., Biomm SA and Atom Empreendimentos go up and down completely randomly.
Pair Corralation between Biomm SA and Atom Empreendimentos
Assuming the 90 days trading horizon Biomm SA is expected to under-perform the Atom Empreendimentos. But the stock apears to be less risky and, when comparing its historical volatility, Biomm SA is 2.54 times less risky than Atom Empreendimentos. The stock trades about -0.09 of its potential returns per unit of risk. The Atom Empreendimentos e is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Atom Empreendimentos e on September 2, 2024 and sell it today you would lose (1.00) from holding Atom Empreendimentos e or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomm SA vs. Atom Empreendimentos e
Performance |
| Timeline |
| Biomm SA |
| Atom Empreendimentos |
Biomm SA and Atom Empreendimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomm SA and Atom Empreendimentos
The main advantage of trading using opposite Biomm SA and Atom Empreendimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomm SA position performs unexpectedly, Atom Empreendimentos 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 Atom Empreendimentos will offset losses from the drop in Atom Empreendimentos' long position.The idea behind Biomm SA and Atom Empreendimentos e 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.| Atom Empreendimentos vs. LPS Brasil | Atom Empreendimentos vs. PBG SA | Atom Empreendimentos vs. Springs Global Participaes | Atom Empreendimentos vs. Indstrias Romi 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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