Correlation Between Atos SE and Shionogi

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

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

Diversification Opportunities for Atos SE and Shionogi

-0.36

Correlation Coefficient

Atos SE  Shionogi

Very good diversification

The 3 months correlation between Atos and Shionogi is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Atos SE and Shionogi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shionogi and Atos SE 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 Atos SE are associated (or correlated) with Shionogi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shionogi has no effect on the direction of Atos SE i.e., Atos SE and Shionogi go up and down completely randomly.

Pair Corralation between Atos SE and Shionogi

Assuming the 90 days horizon Atos SE is expected to generate 29.71 times more return on investment than Shionogi. However, Atos SE is 29.71 times more volatile than Shionogi Co. It trades about 0.03 of its potential returns per unit of risk. Shionogi Co is currently generating about -0.01 per unit of risk. If you would invest  1,074  in Atos SE on September 23, 2024 and sell it today you would lose (1,074) from holding Atos SE or give up 99.98% of portfolio value over 90 days.

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

Atos SE  vs.  Shionogi Co

Atos SE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atos SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Atos SE reported solid returns over the last few months and may actually be approaching a breakup point.

Shionogi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shionogi Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Shionogi is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Atos SE and Shionogi

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

The idea behind Atos SE and Shionogi Co 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.

Check out your portfolio center.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.