Correlation Between Atari SA and Nacon Sa

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

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

Diversification Opportunities for Atari SA and Nacon Sa

-0.71

Correlation Coefficient

Atari SA  Nacon Sa

Pay attention - limited upside

The 3 months correlation between Atari and Nacon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Atari SA and Nacon Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nacon Sa and Atari SA 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 Atari SA are associated (or correlated) with Nacon Sa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nacon Sa has no effect on the direction of Atari SA i.e., Atari SA and Nacon Sa go up and down completely randomly.

Pair Corralation between Atari SA and Nacon Sa

Assuming the 90 days trading horizon Atari SA is expected to generate 0.87 times more return on investment than Nacon Sa. However, Atari SA is 1.15 times less risky than Nacon Sa. It trades about 0.11 of its potential returns per unit of risk. Nacon Sa is currently generating about -0.35 per unit of risk. If you would invest  10.00  in Atari SA on September 2, 2024 and sell it today you would earn a total of  2.00  from holding Atari SA or generate 20.0% return on investment over 90 days.

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

Atari SA  vs.  Nacon Sa

Atari SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atari SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Atari SA reported solid returns over the last few months and may actually be approaching a breakup point.

Nacon Sa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nacon Sa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Atari SA and Nacon Sa

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

The idea behind Atari SA and Nacon Sa 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.