Correlation Between Atesco Industrial and Van Dien

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

Diversification Opportunities for Atesco Industrial and Van Dien

0.33

Correlation Coefficient

Atesco Industrial  Van Dien

Weak diversification

The 3 months correlation between Atesco and Van is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Atesco Industrial Cartering and Van Dien Fused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van Dien Fused 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 Van Dien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van Dien Fused has no effect on the direction of Atesco Industrial i.e., Atesco Industrial and Van Dien go up and down completely randomly.

Pair Corralation between Atesco Industrial and Van Dien

Assuming the 90 days trading horizon Atesco Industrial is expected to generate 1.17 times less return on investment than Van Dien. In addition to that, Atesco Industrial is 1.48 times more volatile than Van Dien Fused. It trades about 0.11 of its total potential returns per unit of risk. Van Dien Fused is currently generating about 0.19 per unit of volatility. If you would invest  1,250,000  in Van Dien Fused on December 20, 2024 and sell it today you would earn a total of  445,000  from holding Van Dien Fused or generate 35.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Atesco Industrial Cartering  vs.  Van Dien Fused

Atesco Industrial

Risk-Adjusted Performance

OK

Over the last 90 days Atesco Industrial Cartering has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Van Dien Fused

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Van Dien Fused are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Van Dien displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atesco Industrial and Van Dien

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

The idea behind Atesco Industrial Cartering and Van Dien Fused 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.