Correlation Between Saia and ATRenew
Can any of the company-specific risk be diversified away by investing in both Saia and ATRenew 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 Saia and ATRenew into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saia Inc and ATRenew Inc DRC, you can compare the effects of market volatilities on Saia and ATRenew 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 Saia with a short position of ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saia and ATRenew.
Diversification Opportunities for Saia and ATRenew
Weak diversification
The 3 months correlation between Saia and ATRenew is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and Saia 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 Saia Inc are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Saia i.e., Saia and ATRenew go up and down completely randomly.
Pair Corralation between Saia and ATRenew
Given the investment horizon of 90 days Saia is expected to generate 2.39 times less return on investment than ATRenew. But when comparing it to its historical volatility, Saia Inc is 1.52 times less risky than ATRenew. It trades about 0.2 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 247.00 in ATRenew Inc DRC on August 31, 2024 and sell it today you would earn a total of 97.00 from holding ATRenew Inc DRC or generate 39.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saia Inc vs. ATRenew Inc DRC
Performance |
| Timeline |
| Saia Inc |
| ATRenew Inc DRC |
Saia and ATRenew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saia and ATRenew
The main advantage of trading using opposite Saia and ATRenew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia position performs unexpectedly, ATRenew 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 ATRenew will offset losses from the drop in ATRenew's long position.The idea behind Saia Inc and ATRenew Inc DRC 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.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |