Correlation Between Cowen and ATRenew
Can any of the company-specific risk be diversified away by investing in both Cowen and ATRenew 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 Cowen and ATRenew into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cowen Group and ATRenew Inc DRC, you can compare the effects of market volatilities on Cowen and ATRenew 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 Cowen with a short position of ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cowen and ATRenew.
Diversification Opportunities for Cowen and ATRenew
Very weak diversification
The 3 months correlation between Cowen and ATRenew is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cowen Group and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and Cowen 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 Cowen Group are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Cowen i.e., Cowen and ATRenew go up and down completely randomly.
Pair Corralation between Cowen and ATRenew
Given the investment horizon of 90 days Cowen is expected to generate 6.09 times less return on investment than ATRenew. But when comparing it to its historical volatility, Cowen Group is 48.62 times less risky than ATRenew. It trades about 0.28 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 252.00 in ATRenew Inc DRC on September 3, 2024 and sell it today you would earn a total of 77.00 from holding ATRenew Inc DRC or generate 30.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 10.91% |
| Values | Daily Returns |
Cowen Group vs. ATRenew Inc DRC
Performance |
| Timeline |
| Cowen Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ATRenew Inc DRC |
Cowen and ATRenew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cowen and ATRenew
The main advantage of trading using opposite Cowen and ATRenew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cowen position performs unexpectedly, ATRenew 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 ATRenew will offset losses from the drop in ATRenew's long position.| Cowen vs. Ihuman Inc | Cowen vs. Where Food Comes | Cowen vs. Cadence Design Systems | Cowen vs. Zane Interactive Publishing |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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