Correlation Between ATP 30 and E For

Can any of the company-specific risk be diversified away by investing in both ATP 30 and E For 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 ATP 30 and E For into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATP 30 Public and E for L, you can compare the effects of market volatilities on ATP 30 and E For 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 ATP 30 with a short position of E For. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATP 30 and E For.

Diversification Opportunities for ATP 30 and E For

0.61

Correlation Coefficient

ATP 30  E For

Poor diversification

The 3 months correlation between ATP and EFORL is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ATP 30 Public and E for L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E for L and ATP 30 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 ATP 30 Public are associated (or correlated) with E For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E for L has no effect on the direction of ATP 30 i.e., ATP 30 and E For go up and down completely randomly.

Pair Corralation between ATP 30 and E For

Assuming the 90 days trading horizon ATP 30 is expected to generate 7.33 times less return on investment than E For. But when comparing it to its historical volatility, ATP 30 Public is 2.61 times less risky than E For. It trades about 0.09 of its potential returns per unit of risk. E for L is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  12.00  in E for L on September 12, 2024 and sell it today you would earn a total of  16.00  from holding E for L or generate 133.33% return on investment over 90 days.

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

ATP 30 Public  vs.  E for L

ATP 30 Public

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATP 30 Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, ATP 30 sustained solid returns over the last few months and may actually be approaching a breakup point.

E for L

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in E for L are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, E For sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATP 30 and E For

The main advantage of trading using opposite ATP 30 and E For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATP 30 position performs unexpectedly, E For 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 E For will offset losses from the drop in E For's long position.

The idea behind ATP 30 Public and E for L 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.