Correlation Between Sea and Atari SA
Can any of the company-specific risk be diversified away by investing in both Sea 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 Sea and Atari SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Atari SA, you can compare the effects of market volatilities on Sea 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 Sea with a short position of Atari SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Atari SA.
Diversification Opportunities for Sea and Atari SA
Modest diversification
The 3 months correlation between Sea and Atari is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Atari SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atari SA and Sea 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 Sea 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 Sea i.e., Sea and Atari SA go up and down completely randomly.
Pair Corralation between Sea and Atari SA
Allowing for the 90-day total investment horizon Sea is expected to generate 4.11 times less return on investment than Atari SA. But when comparing it to its historical volatility, Sea is 3.48 times less risky than Atari SA. It trades about 0.05 of its potential returns per unit of risk. Atari SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Atari SA on August 26, 2024 and sell it today you would lose (1.00) from holding Atari SA or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea vs. Atari SA
Performance |
| Timeline |
| Sea |
| Atari SA |
Sea and Atari SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and Atari SA
The main advantage of trading using opposite Sea and Atari SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea 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.| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
| Atari SA vs. GDEV Inc | Atari SA vs. Doubledown Interactive Co | Atari SA vs. Playstudios | Atari SA vs. SohuCom |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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