Correlation Between Aritzia and ATA Creativity

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

By analyzing existing cross correlation between Aritzia and ATA Creativity Global, you can compare the effects of market volatilities on Aritzia and ATA Creativity 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 Aritzia with a short position of ATA Creativity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aritzia and ATA Creativity.

Diversification Opportunities for Aritzia and ATA Creativity

-0.73

Correlation Coefficient

Aritzia  ATA Creativity

Pay attention - limited upside

The 3 months correlation between Aritzia and ATA is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aritzia and ATA Creativity Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATA Creativity Global and Aritzia 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 Aritzia are associated (or correlated) with ATA Creativity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATA Creativity Global has no effect on the direction of Aritzia i.e., Aritzia and ATA Creativity go up and down completely randomly.

Pair Corralation between Aritzia and ATA Creativity

Assuming the 90 days horizon Aritzia is expected to generate 0.67 times more return on investment than ATA Creativity. However, Aritzia is 1.49 times less risky than ATA Creativity. It trades about 0.29 of its potential returns per unit of risk. ATA Creativity Global is currently generating about -0.37 per unit of risk. If you would invest  3,282  in Aritzia on September 25, 2024 and sell it today you would earn a total of  424.00  from holding Aritzia or generate 12.92% return on investment over 90 days.

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

Aritzia  vs.  ATA Creativity Global

Aritzia

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aritzia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Aritzia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ATA Creativity Global

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ATA Creativity Global are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, ATA Creativity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aritzia and ATA Creativity

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

The idea behind Aritzia and ATA Creativity Global 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.