Correlation Between ANT and Atea ASA

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

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

Diversification Opportunities for ANT and Atea ASA

-0.25

Correlation Coefficient

ANT  Atea ASA

Very good diversification

The 3 months correlation between ANT and Atea is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Atea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea ASA and ANT 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 ANT are associated (or correlated) with Atea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea ASA has no effect on the direction of ANT i.e., ANT and Atea ASA go up and down completely randomly.

Pair Corralation between ANT and Atea ASA

Assuming the 90 days trading horizon ANT is expected to generate 8.58 times more return on investment than Atea ASA. However, ANT is 8.58 times more volatile than Atea ASA. It trades about 0.06 of its potential returns per unit of risk. Atea ASA is currently generating about 0.08 per unit of risk. If you would invest  145.00  in ANT on October 10, 2024 and sell it today you would earn a total of  2.00  from holding ANT or generate 1.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

ANT  vs.  Atea ASA

ANT

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atea ASA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atea ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Atea ASA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Atea ASA

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

The idea behind ANT and Atea ASA 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.