Correlation Between ATMA Participaes and Sequoia Logstica

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

Diversification Opportunities for ATMA Participaes and Sequoia Logstica

0.32

Correlation Coefficient

ATMA Participaes  Sequoia Logstica

Weak diversification

The 3 months correlation between ATMA and Sequoia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and Sequoia Logstica e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequoia Logstica e 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 Sequoia Logstica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequoia Logstica e has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and Sequoia Logstica go up and down completely randomly.

Pair Corralation between ATMA Participaes and Sequoia Logstica

Assuming the 90 days trading horizon ATMA Participaes SA is expected to generate 0.66 times more return on investment than Sequoia Logstica. However, ATMA Participaes SA is 1.52 times less risky than Sequoia Logstica. It trades about 0.02 of its potential returns per unit of risk. Sequoia Logstica e is currently generating about -0.05 per unit of risk. If you would invest  111.00  in ATMA Participaes SA on December 25, 2024 and sell it today you would earn a total of  1.00  from holding ATMA Participaes SA or generate 0.9% 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.  Sequoia Logstica e

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.

Sequoia Logstica e

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sequoia Logstica e 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.

Pair Trading with ATMA Participaes and Sequoia Logstica

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

The idea behind ATMA Participaes SA and Sequoia Logstica e 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.