Correlation Between Automatic Data and Atos SE

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

By analyzing existing cross correlation between Automatic Data Processing and Atos SE, you can compare the effects of market volatilities on Automatic Data and Atos SE 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 Automatic Data with a short position of Atos SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Atos SE.

Diversification Opportunities for Automatic Data and Atos SE

0.0

Correlation Coefficient

Automatic Data  Atos SE

Pay attention - limited upside

The 3 months correlation between Automatic and Atos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Atos SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos SE and Automatic Data 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 Automatic Data Processing are associated (or correlated) with Atos SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos SE has no effect on the direction of Automatic Data i.e., Automatic Data and Atos SE go up and down completely randomly.

Pair Corralation between Automatic Data and Atos SE

If you would invest  19,831  in Automatic Data Processing on October 25, 2024 and sell it today you would earn a total of  8,829  from holding Automatic Data Processing or generate 44.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Automatic Data Processing  vs.  Atos SE

Automatic Data Processing

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Automatic Data Processing are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Automatic Data may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Atos SE

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with Automatic Data and Atos SE

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

The idea behind Automatic Data Processing and Atos SE 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.