Correlation Between ATMA Participaes and Plano Plano

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

Diversification Opportunities for ATMA Participaes and Plano Plano

0.39

Correlation Coefficient

ATMA Participaes  Plano Plano

Weak diversification

The 3 months correlation between ATMA and Plano is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and Plano Plano Desenvolvimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plano Plano Desenvol 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 Plano Plano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plano Plano Desenvol has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and Plano Plano go up and down completely randomly.

Pair Corralation between ATMA Participaes and Plano Plano

Assuming the 90 days trading horizon ATMA Participaes SA is expected to under-perform the Plano Plano. In addition to that, ATMA Participaes is 1.05 times more volatile than Plano Plano Desenvolvimento. It trades about -0.04 of its total potential returns per unit of risk. Plano Plano Desenvolvimento is currently generating about 0.0 per unit of volatility. If you would invest  1,113  in Plano Plano Desenvolvimento on November 28, 2024 and sell it today you would lose (46.00) from holding Plano Plano Desenvolvimento or give up 4.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

ATMA Participaes SA  vs.  Plano Plano Desenvolvimento

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Plano Plano Desenvol

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ATMA Participaes and Plano Plano

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

The idea behind ATMA Participaes SA and Plano Plano Desenvolvimento 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.