Correlation Between Aedas Homes and Atrys Health

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

By analyzing existing cross correlation between Aedas Homes SL and Atrys Health SL, you can compare the effects of market volatilities on Aedas Homes 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 Aedas Homes with a short position of Atrys Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and Atrys Health.

Diversification Opportunities for Aedas Homes and Atrys Health

0.55

Correlation Coefficient

Aedas Homes  Atrys Health

Very weak diversification

The 3 months correlation between Aedas and Atrys is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SL and Atrys Health SL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrys Health SL and Aedas Homes 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 Aedas Homes SL 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 SL has no effect on the direction of Aedas Homes i.e., Aedas Homes and Atrys Health go up and down completely randomly.

Pair Corralation between Aedas Homes and Atrys Health

Assuming the 90 days trading horizon Aedas Homes SL is expected to generate 0.83 times more return on investment than Atrys Health. However, Aedas Homes SL is 1.21 times less risky than Atrys Health. It trades about 0.11 of its potential returns per unit of risk. Atrys Health SL is currently generating about -0.05 per unit of risk. If you would invest  1,100  in Aedas Homes SL on October 12, 2024 and sell it today you would earn a total of  1,480  from holding Aedas Homes SL or generate 134.55% return on investment over 90 days.

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

Aedas Homes SL  vs.  Atrys Health SL

Aedas Homes SL

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aedas Homes SL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Aedas Homes is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Atrys Health SL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atrys Health SL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Atrys Health is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aedas Homes and Atrys Health

The main advantage of trading using opposite Aedas Homes and Atrys Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes 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.

The idea behind Aedas Homes SL and Atrys Health SL 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.