Correlation Between ATEME SA and Figeac Aero

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

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

Diversification Opportunities for ATEME SA and Figeac Aero

0.43

Correlation Coefficient

ATEME SA  Figeac Aero

Very weak diversification

The 3 months correlation between ATEME and Figeac is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ATEME SA and Figeac Aero SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figeac Aero SA and ATEME 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 ATEME SA are associated (or correlated) with Figeac Aero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figeac Aero SA has no effect on the direction of ATEME SA i.e., ATEME SA and Figeac Aero go up and down completely randomly.

Pair Corralation between ATEME SA and Figeac Aero

Assuming the 90 days trading horizon ATEME SA is expected to generate 2.6 times more return on investment than Figeac Aero. However, ATEME SA is 2.6 times more volatile than Figeac Aero SA. It trades about 0.1 of its potential returns per unit of risk. Figeac Aero SA is currently generating about 0.17 per unit of risk. If you would invest  560.00  in ATEME SA on October 15, 2024 and sell it today you would earn a total of  28.00  from holding ATEME SA or generate 5.0% return on investment over 90 days.

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

ATEME SA  vs.  Figeac Aero SA

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.

Figeac Aero SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Figeac Aero SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Figeac Aero may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ATEME SA and Figeac Aero

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

The idea behind ATEME SA and Figeac Aero 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.