Correlation Between Atinum Investment and Carriesoft

Can any of the company-specific risk be diversified away by investing in both Atinum Investment and Carriesoft 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 Atinum Investment and Carriesoft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atinum Investment Co and Carriesoft Co, you can compare the effects of market volatilities on Atinum Investment and Carriesoft 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 Atinum Investment with a short position of Carriesoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atinum Investment and Carriesoft.

Diversification Opportunities for Atinum Investment and Carriesoft

-0.18

Correlation Coefficient

Atinum Investment  Carriesoft

Good diversification

The 3 months correlation between Atinum and Carriesoft is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Atinum Investment Co and Carriesoft Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carriesoft and Atinum Investment 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 Atinum Investment Co are associated (or correlated) with Carriesoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carriesoft has no effect on the direction of Atinum Investment i.e., Atinum Investment and Carriesoft go up and down completely randomly.

Pair Corralation between Atinum Investment and Carriesoft

Assuming the 90 days trading horizon Atinum Investment Co is expected to under-perform the Carriesoft. But the stock apears to be less risky and, when comparing its historical volatility, Atinum Investment Co is 1.68 times less risky than Carriesoft. The stock trades about -0.01 of its potential returns per unit of risk. The Carriesoft Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  380,500  in Carriesoft Co on December 2, 2024 and sell it today you would earn a total of  244,500  from holding Carriesoft Co or generate 64.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Atinum Investment Co  vs.  Carriesoft Co

Atinum Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atinum Investment Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Atinum Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Carriesoft

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carriesoft Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Carriesoft sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atinum Investment and Carriesoft

The main advantage of trading using opposite Atinum Investment and Carriesoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atinum Investment position performs unexpectedly, Carriesoft 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 Carriesoft will offset losses from the drop in Carriesoft's long position.

The idea behind Atinum Investment Co and Carriesoft Co 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.