Correlation Between The9 and Atari SA
Can any of the company-specific risk be diversified away by investing in both The9 and Atari 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 The9 and Atari SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The9 Ltd ADR and Atari SA, you can compare the effects of market volatilities on The9 and Atari 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 The9 with a short position of Atari SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of The9 and Atari SA.
Diversification Opportunities for The9 and Atari SA
Significant diversification
The 3 months correlation between The9 and Atari is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding The9 Ltd ADR and Atari SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atari SA and The9 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 The9 Ltd ADR are associated (or correlated) with Atari SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atari SA has no effect on the direction of The9 i.e., The9 and Atari SA go up and down completely randomly.
Pair Corralation between The9 and Atari SA
Given the investment horizon of 90 days The9 Ltd ADR is expected to generate 0.8 times more return on investment than Atari SA. However, The9 Ltd ADR is 1.26 times less risky than Atari SA. It trades about 0.26 of its potential returns per unit of risk. Atari SA is currently generating about -0.03 per unit of risk. If you would invest 866.00 in The9 Ltd ADR on August 28, 2024 and sell it today you would earn a total of 244.00 from holding The9 Ltd ADR or generate 28.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The9 Ltd ADR vs. Atari SA
Performance |
| Timeline |
| The9 Ltd ADR |
| Atari SA |
The9 and Atari SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The9 and Atari SA
The main advantage of trading using opposite The9 and Atari SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The9 position performs unexpectedly, Atari 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 Atari SA will offset losses from the drop in Atari SA's long position.| The9 vs. Atari SA | The9 vs. Victory Square Technologies | The9 vs. Motorsport Gaming Us | The9 vs. Alpha Esports Tech |
| Atari SA vs. ImagineAR | Atari SA vs. Fandom Sports Media | Atari SA vs. Image Protect | Atari SA vs. Coinsilium Group |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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