Correlation Between Atos SE and APT Systems

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

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

Diversification Opportunities for Atos SE and APT Systems

0.29

Correlation Coefficient

Atos SE  APT Systems

Modest diversification

The 3 months correlation between Atos and APT is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Atos SE and APT Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APT Systems and Atos SE 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 Atos SE are associated (or correlated) with APT Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APT Systems has no effect on the direction of Atos SE i.e., Atos SE and APT Systems go up and down completely randomly.

Pair Corralation between Atos SE and APT Systems

Assuming the 90 days horizon Atos SE is expected to generate 12.2 times more return on investment than APT Systems. However, Atos SE is 12.2 times more volatile than APT Systems. It trades about 0.24 of its potential returns per unit of risk. APT Systems is currently generating about 0.09 per unit of risk. If you would invest  0.54  in Atos SE on October 10, 2024 and sell it today you would lose (0.26) from holding Atos SE or give up 48.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Atos SE  vs.  APT Systems

Atos SE

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Atos SE are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Atos SE reported solid returns over the last few months and may actually be approaching a breakup point.

APT Systems

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in APT Systems are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, APT Systems showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atos SE and APT Systems

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

The idea behind Atos SE and APT Systems 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.