Correlation Between Voyageurs and ATEME SA

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

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

Diversification Opportunities for Voyageurs and ATEME SA

0.05

Correlation Coefficient

Voyageurs  ATEME SA

Significant diversification

The 3 months correlation between Voyageurs and ATEME is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Voyageurs du Monde and ATEME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATEME SA and Voyageurs 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 Voyageurs du Monde are associated (or correlated) with ATEME SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATEME SA has no effect on the direction of Voyageurs i.e., Voyageurs and ATEME SA go up and down completely randomly.

Pair Corralation between Voyageurs and ATEME SA

Assuming the 90 days trading horizon Voyageurs du Monde is expected to generate 0.47 times more return on investment than ATEME SA. However, Voyageurs du Monde is 2.11 times less risky than ATEME SA. It trades about 0.07 of its potential returns per unit of risk. ATEME SA is currently generating about 0.0 per unit of risk. If you would invest  11,650  in Voyageurs du Monde on October 14, 2024 and sell it today you would earn a total of  3,130  from holding Voyageurs du Monde or generate 26.87% return on investment over 90 days.

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

Voyageurs du Monde  vs.  ATEME SA

Voyageurs du Monde

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voyageurs du Monde are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Voyageurs is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

ATEME SA

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATEME SA are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, ATEME SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Voyageurs and ATEME SA

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

The idea behind Voyageurs du Monde and ATEME 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.