Correlation Between ATMA Participaes and FedEx

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

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

Diversification Opportunities for ATMA Participaes and FedEx

0.26

Correlation Coefficient

ATMA Participaes  FedEx

Modest diversification

The 3 months correlation between ATMA and FedEx is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and ATMA Participaes 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 ATMA Participaes SA are associated (or correlated) with FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and FedEx go up and down completely randomly.

Pair Corralation between ATMA Participaes and FedEx

Assuming the 90 days trading horizon ATMA Participaes SA is expected to generate 0.8 times more return on investment than FedEx. However, ATMA Participaes SA is 1.25 times less risky than FedEx. It trades about 0.06 of its potential returns per unit of risk. FedEx is currently generating about -0.11 per unit of risk. If you would invest  113.00  in ATMA Participaes SA on December 4, 2024 and sell it today you would earn a total of  2.00  from holding ATMA Participaes SA or generate 1.77% return on investment over 90 days.

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

ATMA Participaes SA  vs.  FedEx

ATMA Participaes

Risk-Adjusted Performance

Very Weak

Over the last 90 days ATMA Participaes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ATMA Participaes is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

FedEx

Risk-Adjusted Performance

Very Weak

Over the last 90 days FedEx has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ATMA Participaes and FedEx

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

The idea behind ATMA Participaes SA and FedEx 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.