Correlation Between Thales SA and Atos SE
Can any of the company-specific risk be diversified away by investing in both Thales SA and Atos SE 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 Thales SA and Atos SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thales SA and Atos SE, you can compare the effects of market volatilities on Thales SA and Atos SE 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 Thales SA with a short position of Atos SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thales SA and Atos SE.
Diversification Opportunities for Thales SA and Atos SE
Very weak diversification
The 3 months correlation between Thales and Atos is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Thales SA and Atos SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos SE and Thales 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 Thales SA are associated (or correlated) with Atos SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos SE has no effect on the direction of Thales SA i.e., Thales SA and Atos SE go up and down completely randomly.
Pair Corralation between Thales SA and Atos SE
Assuming the 90 days horizon Thales SA is expected to under-perform the Atos SE. But the stock apears to be less risky and, when comparing its historical volatility, Thales SA is 107.92 times less risky than Atos SE. The stock trades about -0.15 of its potential returns per unit of risk. The Atos SE is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 0.52 in Atos SE on August 27, 2024 and sell it today you would earn a total of 30.48 from holding Atos SE or generate 5861.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thales SA vs. Atos SE
Performance |
| Timeline |
| Thales SA |
| Atos SE |
Thales SA and Atos SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thales SA and Atos SE
The main advantage of trading using opposite Thales SA and Atos SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thales SA position performs unexpectedly, Atos SE 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 Atos SE will offset losses from the drop in Atos SE's long position.| Thales SA vs. Safran SA | Thales SA vs. Dassault Systemes SE | Thales SA vs. Dassault Aviation SA | Thales SA vs. Vinci 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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