Correlation Between Varta AG and ATRYS HEALTH

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Can any of the company-specific risk be diversified away by investing in both Varta AG 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 Varta AG and ATRYS HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varta AG and ATRYS HEALTH SA, you can compare the effects of market volatilities on Varta AG 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 Varta AG with a short position of ATRYS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varta AG and ATRYS HEALTH.

Diversification Opportunities for Varta AG and ATRYS HEALTH

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Varta and ATRYS is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Varta AG and ATRYS HEALTH SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRYS HEALTH SA and Varta AG 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 Varta AG 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 SA has no effect on the direction of Varta AG i.e., Varta AG and ATRYS HEALTH go up and down completely randomly.

Pair Corralation between Varta AG and ATRYS HEALTH

Assuming the 90 days trading horizon Varta AG is expected to generate 3.54 times more return on investment than ATRYS HEALTH. However, Varta AG is 3.54 times more volatile than ATRYS HEALTH SA. It trades about -0.01 of its potential returns per unit of risk. ATRYS HEALTH SA is currently generating about -0.05 per unit of risk. If you would invest  2,265  in Varta AG on September 14, 2024 and sell it today you would lose (2,080) from holding Varta AG or give up 91.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Varta AG  vs.  ATRYS HEALTH SA

 Performance 
       Timeline  
Varta AG 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Varta AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Varta AG exhibited solid returns over the last few months and may actually be approaching a breakup point.
ATRYS HEALTH SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ATRYS HEALTH SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ATRYS HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Varta AG and ATRYS HEALTH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Varta AG and ATRYS HEALTH

The main advantage of trading using opposite Varta AG and ATRYS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varta AG 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.
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The idea behind Varta AG and ATRYS HEALTH SA 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.
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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