Correlation Between Atenor SA and Aedifica

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

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

Diversification Opportunities for Atenor SA and Aedifica

0.77

Correlation Coefficient

Atenor SA  Aedifica

Poor diversification

The 3 months correlation between Atenor and Aedifica is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Atenor SA and Aedifica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedifica and Atenor 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 Atenor SA are associated (or correlated) with Aedifica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedifica has no effect on the direction of Atenor SA i.e., Atenor SA and Aedifica go up and down completely randomly.

Pair Corralation between Atenor SA and Aedifica

Assuming the 90 days trading horizon Atenor SA is expected to under-perform the Aedifica. In addition to that, Atenor SA is 1.42 times more volatile than Aedifica. It trades about -0.1 of its total potential returns per unit of risk. Aedifica is currently generating about 0.15 per unit of volatility. If you would invest  5,550  in Aedifica on October 22, 2024 and sell it today you would earn a total of  150.00  from holding Aedifica or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Atenor SA  vs.  Aedifica

Atenor SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atenor 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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Aedifica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aedifica has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Aedifica is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Atenor SA and Aedifica

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

The idea behind Atenor SA and Aedifica 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.