Correlation Between Telefonica and Atrys Health
Can any of the company-specific risk be diversified away by investing in both Telefonica and Atrys Health 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 Telefonica and Atrys Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonica and Atrys Health SL, you can compare the effects of market volatilities on Telefonica and Atrys Health 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 Telefonica with a short position of Atrys Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonica and Atrys Health.
Diversification Opportunities for Telefonica and Atrys Health
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telefonica and Atrys is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Telefonica and Atrys Health SL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrys Health SL and Telefonica 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 Telefonica are associated (or correlated) with Atrys Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrys Health SL has no effect on the direction of Telefonica i.e., Telefonica and Atrys Health go up and down completely randomly.
Pair Corralation between Telefonica and Atrys Health
Assuming the 90 days trading horizon Telefonica is expected to under-perform the Atrys Health. But the stock apears to be less risky and, when comparing its historical volatility, Telefonica is 1.25 times less risky than Atrys Health. The stock trades about -0.02 of its potential returns per unit of risk. The Atrys Health SL is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Atrys Health SL on November 2, 2024 and sell it today you would earn a total of 7.00 from holding Atrys Health SL or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonica vs. Atrys Health SL
Performance |
| Timeline |
| Telefonica |
| Atrys Health SL |
Telefonica and Atrys Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonica and Atrys Health
The main advantage of trading using opposite Telefonica and Atrys Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonica position performs unexpectedly, Atrys Health 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 Atrys Health will offset losses from the drop in Atrys Health's long position.| Telefonica vs. Banco Santander | Telefonica vs. Repsol | Telefonica vs. Iberdrola SA | Telefonica vs. Banco Bilbao Vizcaya |
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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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