Correlation Between ATMA Participaes and Procter Gamble

Can any of the company-specific risk be diversified away by investing in both ATMA Participaes and Procter Gamble 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 Procter Gamble 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 The Procter Gamble, you can compare the effects of market volatilities on ATMA Participaes and Procter Gamble 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 Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATMA Participaes and Procter Gamble.

Diversification Opportunities for ATMA Participaes and Procter Gamble

-0.51

Correlation Coefficient

ATMA Participaes  Procter Gamble

Excellent diversification

The 3 months correlation between ATMA and Procter is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and The Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble 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 Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and Procter Gamble go up and down completely randomly.

Pair Corralation between ATMA Participaes and Procter Gamble

Assuming the 90 days trading horizon ATMA Participaes SA is expected to under-perform the Procter Gamble. In addition to that, ATMA Participaes is 1.91 times more volatile than The Procter Gamble. It trades about -0.11 of its total potential returns per unit of risk. The Procter Gamble is currently generating about 0.44 per unit of volatility. If you would invest  6,888  in The Procter Gamble on August 30, 2024 and sell it today you would earn a total of  812.00  from holding The Procter Gamble or generate 11.79% return on investment over 90 days.

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

ATMA Participaes SA  vs.  The Procter Gamble

ATMA Participaes

Risk-Adjusted Performance

0 of 100

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.

Procter Gamble

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Procter Gamble are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Procter Gamble sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATMA Participaes and Procter Gamble

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

The idea behind ATMA Participaes SA and The Procter Gamble 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 Stocks Directory module to find actively traded stocks across global markets.