Correlation Between Berkeley Energia and Atrys Health

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

By analyzing existing cross correlation between Berkeley Energia Limited and Atrys Health SL, you can compare the effects of market volatilities on Berkeley Energia and Atrys Health 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 Berkeley Energia with a short position of Atrys Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkeley Energia and Atrys Health.

Diversification Opportunities for Berkeley Energia and Atrys Health

0.01

Correlation Coefficient

Berkeley Energia  Atrys Health

Significant diversification

The 3 months correlation between Berkeley and Atrys is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Berkeley Energia Limited and Atrys Health SL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrys Health SL and Berkeley Energia 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 Berkeley Energia Limited are associated (or correlated) with Atrys Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrys Health SL has no effect on the direction of Berkeley Energia i.e., Berkeley Energia and Atrys Health go up and down completely randomly.

Pair Corralation between Berkeley Energia and Atrys Health

Assuming the 90 days trading horizon Berkeley Energia Limited is expected to generate 1.24 times more return on investment than Atrys Health. However, Berkeley Energia is 1.24 times more volatile than Atrys Health SL. It trades about -0.02 of its potential returns per unit of risk. Atrys Health SL is currently generating about -0.06 per unit of risk. If you would invest  23.00  in Berkeley Energia Limited on September 14, 2024 and sell it today you would lose (2.00) from holding Berkeley Energia Limited or give up 8.7% of portfolio value over 90 days.

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

Berkeley Energia Limited  vs.  Atrys Health SL

Berkeley Energia

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Berkeley Energia Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Berkeley Energia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Atrys Health SL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atrys Health SL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Atrys Health is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Berkeley Energia and Atrys Health

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

The idea behind Berkeley Energia Limited and Atrys Health SL 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.