Correlation Between ATMA Participaes and Gen Digital

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

Diversification Opportunities for ATMA Participaes and Gen Digital

0.57

Correlation Coefficient

ATMA Participaes  Gen Digital

Very weak diversification

The 3 months correlation between ATMA and Gen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital 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 Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and Gen Digital go up and down completely randomly.

Pair Corralation between ATMA Participaes and Gen Digital

Assuming the 90 days trading horizon ATMA Participaes SA is expected to generate 4.34 times more return on investment than Gen Digital. However, ATMA Participaes is 4.34 times more volatile than Gen Digital. It trades about 0.02 of its potential returns per unit of risk. Gen Digital is currently generating about -0.12 per unit of risk. If you would invest  110.00  in ATMA Participaes SA on December 22, 2024 and sell it today you would earn a total of  1.00  from holding ATMA Participaes SA or generate 0.91% return on investment over 90 days.

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

ATMA Participaes SA  vs.  Gen Digital

ATMA Participaes

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATMA Participaes SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Gen Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gen Digital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Gen Digital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ATMA Participaes and Gen Digital

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

The idea behind ATMA Participaes SA and Gen Digital 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.