Correlation Between Atos SE and Crypto

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

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

Diversification Opportunities for Atos SE and Crypto

-0.23

Correlation Coefficient

Atos SE  Crypto

Very good diversification

The 3 months correlation between Atos and Crypto is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Atos SE and Crypto Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crypto 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 Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crypto has no effect on the direction of Atos SE i.e., Atos SE and Crypto go up and down completely randomly.

Pair Corralation between Atos SE and Crypto

Assuming the 90 days horizon Atos SE is expected to generate 1.2 times less return on investment than Crypto. In addition to that, Atos SE is 1.29 times more volatile than Crypto Co. It trades about 0.06 of its total potential returns per unit of risk. Crypto Co is currently generating about 0.1 per unit of volatility. If you would invest  0.06  in Crypto Co on December 28, 2024 and sell it today you would earn a total of  0.02  from holding Crypto Co or generate 33.33% return on investment over 90 days.

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

Atos SE  vs.  Crypto Co

Atos SE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atos SE are ranked lower than 4 (%) 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.

Crypto

Risk-Adjusted Performance

OK

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

Pair Trading with Atos SE and Crypto

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

The idea behind Atos SE and Crypto 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.