Correlation Between Atesco Industrial and SSIAM VNX50

Can any of the company-specific risk be diversified away by investing in both Atesco Industrial and SSIAM VNX50 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 Atesco Industrial and SSIAM VNX50 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atesco Industrial Cartering and SSIAM VNX50 ETF, you can compare the effects of market volatilities on Atesco Industrial and SSIAM VNX50 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 Atesco Industrial with a short position of SSIAM VNX50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atesco Industrial and SSIAM VNX50.

Diversification Opportunities for Atesco Industrial and SSIAM VNX50

0.35

Correlation Coefficient

Atesco Industrial  SSIAM VNX50

Weak diversification

The 3 months correlation between Atesco and SSIAM is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Atesco Industrial Cartering and SSIAM VNX50 ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSIAM VNX50 ETF and Atesco Industrial 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 Atesco Industrial Cartering are associated (or correlated) with SSIAM VNX50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSIAM VNX50 ETF has no effect on the direction of Atesco Industrial i.e., Atesco Industrial and SSIAM VNX50 go up and down completely randomly.

Pair Corralation between Atesco Industrial and SSIAM VNX50

Assuming the 90 days trading horizon Atesco Industrial Cartering is expected to generate 4.32 times more return on investment than SSIAM VNX50. However, Atesco Industrial is 4.32 times more volatile than SSIAM VNX50 ETF. It trades about 0.04 of its potential returns per unit of risk. SSIAM VNX50 ETF is currently generating about -0.03 per unit of risk. If you would invest  1,460,000  in Atesco Industrial Cartering on October 10, 2024 and sell it today you would earn a total of  40,000  from holding Atesco Industrial Cartering or generate 2.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	79.69%
Values	Daily Returns

Atesco Industrial Cartering  vs.  SSIAM VNX50 ETF

Atesco Industrial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atesco Industrial Cartering are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Atesco Industrial displayed solid returns over the last few months and may actually be approaching a breakup point.

SSIAM VNX50 ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSIAM VNX50 ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SSIAM VNX50 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atesco Industrial and SSIAM VNX50

The main advantage of trading using opposite Atesco Industrial and SSIAM VNX50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atesco Industrial position performs unexpectedly, SSIAM VNX50 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 SSIAM VNX50 will offset losses from the drop in SSIAM VNX50's long position.

The idea behind Atesco Industrial Cartering and SSIAM VNX50 ETF 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.