Correlation Between Novatech Industries and ATEME SA
Can any of the company-specific risk be diversified away by investing in both Novatech Industries and ATEME SA 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 Novatech Industries and ATEME SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novatech Industries SA and ATEME SA, you can compare the effects of market volatilities on Novatech Industries and ATEME SA 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 Novatech Industries with a short position of ATEME SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novatech Industries and ATEME SA.
Diversification Opportunities for Novatech Industries and ATEME SA
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Novatech and ATEME is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Novatech Industries SA and ATEME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATEME SA and Novatech Industries 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 Novatech Industries SA are associated (or correlated) with ATEME SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATEME SA has no effect on the direction of Novatech Industries i.e., Novatech Industries and ATEME SA go up and down completely randomly.
Pair Corralation between Novatech Industries and ATEME SA
Assuming the 90 days trading horizon Novatech Industries SA is expected to generate 1.55 times more return on investment than ATEME SA. However, Novatech Industries is 1.55 times more volatile than ATEME SA. It trades about 0.04 of its potential returns per unit of risk. ATEME SA is currently generating about -0.02 per unit of risk. If you would invest 920.00 in Novatech Industries SA on September 2, 2024 and sell it today you would earn a total of 130.00 from holding Novatech Industries SA or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novatech Industries SA vs. ATEME SA
Performance |
| Timeline |
| Novatech Industries |
| ATEME SA |
Novatech Industries and ATEME SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novatech Industries and ATEME SA
The main advantage of trading using opposite Novatech Industries and ATEME SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novatech Industries position performs unexpectedly, ATEME SA 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 ATEME SA will offset losses from the drop in ATEME SA's long position.| Novatech Industries vs. X Fab Silicon | Novatech Industries vs. Eutelsat Communications SA | Novatech Industries vs. Metalliance SA | Novatech Industries vs. ISPD Network SA |
| ATEME SA vs. Chargeurs SA | ATEME SA vs. Straumann Holding AG | ATEME SA vs. Manitou BF SA | ATEME SA vs. Amundi Index Solutions |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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