Correlation Between ATA Creativity and Udemy

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

By analyzing existing cross correlation between ATA Creativity Global and Udemy Inc, you can compare the effects of market volatilities on ATA Creativity and Udemy 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 ATA Creativity with a short position of Udemy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATA Creativity and Udemy.

Diversification Opportunities for ATA Creativity and Udemy

0.12

Correlation Coefficient

ATA Creativity  Udemy

Average diversification

The 3 months correlation between ATA and Udemy is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ATA Creativity Global and Udemy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Udemy Inc and ATA Creativity 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 ATA Creativity Global are associated (or correlated) with Udemy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Udemy Inc has no effect on the direction of ATA Creativity i.e., ATA Creativity and Udemy go up and down completely randomly.

Pair Corralation between ATA Creativity and Udemy

Given the investment horizon of 90 days ATA Creativity Global is expected to generate 1.43 times more return on investment than Udemy. However, ATA Creativity is 1.43 times more volatile than Udemy Inc. It trades about 0.01 of its potential returns per unit of risk. Udemy Inc is currently generating about -0.01 per unit of risk. If you would invest  133.00  in ATA Creativity Global on September 1, 2024 and sell it today you would lose (33.00) from holding ATA Creativity Global or give up 24.81% of portfolio value over 90 days.

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

ATA Creativity Global  vs.  Udemy Inc

ATA Creativity Global

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATA Creativity Global are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, ATA Creativity reported solid returns over the last few months and may actually be approaching a breakup point.

Udemy Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Udemy Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Udemy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ATA Creativity and Udemy

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

The idea behind ATA Creativity Global and Udemy Inc 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 Commodity Directory module to find actively traded commodities issued by global exchanges.