Correlation Between Graco and ATS
Can any of the company-specific risk be diversified away by investing in both Graco and ATS 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 Graco and ATS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graco Inc and ATS Corporation, you can compare the effects of market volatilities on Graco and ATS 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 Graco with a short position of ATS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graco and ATS.
Diversification Opportunities for Graco and ATS
Very weak diversification
The 3 months correlation between Graco and ATS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Graco Inc and ATS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATS Corporation and Graco 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 Graco Inc are associated (or correlated) with ATS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATS Corporation has no effect on the direction of Graco i.e., Graco and ATS go up and down completely randomly.
Pair Corralation between Graco and ATS
Considering the 90-day investment horizon Graco is expected to generate 1.01 times less return on investment than ATS. But when comparing it to its historical volatility, Graco Inc is 2.03 times less risky than ATS. It trades about 0.3 of its potential returns per unit of risk. ATS Corporation is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,007 in ATS Corporation on September 3, 2024 and sell it today you would earn a total of 262.00 from holding ATS Corporation or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graco Inc vs. ATS Corp.
Performance |
| Timeline |
| Graco Inc |
| ATS Corporation |
Graco and ATS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graco and ATS
The main advantage of trading using opposite Graco and ATS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graco position performs unexpectedly, ATS 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 ATS will offset losses from the drop in ATS's long position.The idea behind Graco Inc and ATS Corporation 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.| ATS vs. Sensient Technologies | ATS vs. CF Industries Holdings | ATS vs. Chemours Co | ATS vs. Asure Software |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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