Correlation Between Atos SE and IBEX

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

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

Diversification Opportunities for Atos SE and IBEX

0.48

Correlation Coefficient

Atos SE  IBEX

Very weak diversification

The 3 months correlation between Atos and IBEX is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Atos SE and IBEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX 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 IBEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX has no effect on the direction of Atos SE i.e., Atos SE and IBEX go up and down completely randomly.

Pair Corralation between Atos SE and IBEX

Assuming the 90 days horizon Atos SE is expected to generate 6.22 times more return on investment than IBEX. However, Atos SE is 6.22 times more volatile than IBEX. It trades about 0.06 of its potential returns per unit of risk. IBEX is currently generating about 0.14 per unit of risk. If you would invest  0.38  in Atos SE on December 28, 2024 and sell it today you would earn a total of  0.02  from holding Atos SE or generate 5.26% return on investment over 90 days.

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

Atos SE  vs.  IBEX

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.

IBEX

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, IBEX showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atos SE and IBEX

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

The idea behind Atos SE and IBEX 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.