Correlation Between ATEME SA and Xilam Animation

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

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

Diversification Opportunities for ATEME SA and Xilam Animation

-0.64

Correlation Coefficient

ATEME SA  Xilam Animation

Excellent diversification

The 3 months correlation between ATEME and Xilam is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ATEME SA and Xilam Animation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilam Animation 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 Xilam Animation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilam Animation has no effect on the direction of ATEME SA i.e., ATEME SA and Xilam Animation go up and down completely randomly.

Pair Corralation between ATEME SA and Xilam Animation

Assuming the 90 days trading horizon ATEME SA is expected to generate 1.71 times more return on investment than Xilam Animation. However, ATEME SA is 1.71 times more volatile than Xilam Animation. It trades about 0.3 of its potential returns per unit of risk. Xilam Animation is currently generating about 0.05 per unit of risk. If you would invest  450.00  in ATEME SA on September 27, 2024 and sell it today you would earn a total of  116.00  from holding ATEME SA or generate 25.78% return on investment over 90 days.

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

ATEME SA  vs.  Xilam Animation

ATEME SA

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATEME SA are ranked lower than 19 (%) 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.

Xilam Animation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xilam Animation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ATEME SA and Xilam Animation

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

The idea behind ATEME SA and Xilam Animation 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.