Correlation Between Mondelez International and ATMA Participaes
Can any of the company-specific risk be diversified away by investing in both Mondelez International and ATMA Participaes 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 Mondelez International and ATMA Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mondelez International and ATMA Participaes SA, you can compare the effects of market volatilities on Mondelez International and ATMA Participaes 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 Mondelez International with a short position of ATMA Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mondelez International and ATMA Participaes.
Diversification Opportunities for Mondelez International and ATMA Participaes
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mondelez and ATMA is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mondelez International and ATMA Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMA Participaes and Mondelez International 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 Mondelez International are associated (or correlated) with ATMA Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATMA Participaes has no effect on the direction of Mondelez International i.e., Mondelez International and ATMA Participaes go up and down completely randomly.
Pair Corralation between Mondelez International and ATMA Participaes
Assuming the 90 days trading horizon Mondelez International is expected to under-perform the ATMA Participaes. But the stock apears to be less risky and, when comparing its historical volatility, Mondelez International is 1.51 times less risky than ATMA Participaes. The stock trades about -0.21 of its potential returns per unit of risk. The ATMA Participaes SA is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 138.00 in ATMA Participaes SA on August 27, 2024 and sell it today you would lose (8.00) from holding ATMA Participaes SA or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mondelez International vs. ATMA Participaes SA
Performance |
| Timeline |
| Mondelez International |
| ATMA Participaes |
Mondelez International and ATMA Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mondelez International and ATMA Participaes
The main advantage of trading using opposite Mondelez International and ATMA Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mondelez International position performs unexpectedly, ATMA Participaes 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 ATMA Participaes will offset losses from the drop in ATMA Participaes' long position.| Mondelez International vs. Hewlett Packard Co | Mondelez International vs. Zoom Video Communications | Mondelez International vs. BTG Pactual Logstica | Mondelez International vs. Plano Plano Desenvolvimento |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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