Correlation Between ATRESMEDIA and Fastenal
Can any of the company-specific risk be diversified away by investing in both ATRESMEDIA and Fastenal 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 ATRESMEDIA and Fastenal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRESMEDIA and Fastenal Company, you can compare the effects of market volatilities on ATRESMEDIA and Fastenal 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 ATRESMEDIA with a short position of Fastenal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRESMEDIA and Fastenal.
Diversification Opportunities for ATRESMEDIA and Fastenal
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATRESMEDIA and Fastenal is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal and ATRESMEDIA 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 ATRESMEDIA are associated (or correlated) with Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of ATRESMEDIA i.e., ATRESMEDIA and Fastenal go up and down completely randomly.
Pair Corralation between ATRESMEDIA and Fastenal
Assuming the 90 days trading horizon ATRESMEDIA is expected to generate 3.11 times less return on investment than Fastenal. But when comparing it to its historical volatility, ATRESMEDIA is 2.17 times less risky than Fastenal. It trades about 0.18 of its potential returns per unit of risk. Fastenal Company is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 7,159 in Fastenal Company on September 5, 2024 and sell it today you would earn a total of 746.00 from holding Fastenal Company or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ATRESMEDIA vs. Fastenal Company
Performance |
| Timeline |
| ATRESMEDIA |
| Fastenal |
ATRESMEDIA and Fastenal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRESMEDIA and Fastenal
The main advantage of trading using opposite ATRESMEDIA and Fastenal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRESMEDIA position performs unexpectedly, Fastenal 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 Fastenal will offset losses from the drop in Fastenal's long position.| ATRESMEDIA vs. TOTAL GABON | ATRESMEDIA vs. Walgreens Boots Alliance | ATRESMEDIA vs. Peak Resources Limited |
| Fastenal vs. ARROW ELECTRONICS | Fastenal vs. CECO ENVIRONMENTAL | Fastenal vs. KIMBALL ELECTRONICS | Fastenal vs. BLUESCOPE STEEL |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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