Correlation Between ChampionX and Atea ASA

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

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

Diversification Opportunities for ChampionX and Atea ASA

0.0

Correlation Coefficient

ChampionX  Atea ASA

Pay attention - limited upside

The 3 months correlation between ChampionX and Atea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Atea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea ASA and ChampionX 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 ChampionX are associated (or correlated) with Atea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea ASA has no effect on the direction of ChampionX i.e., ChampionX and Atea ASA go up and down completely randomly.

Pair Corralation between ChampionX and Atea ASA

Considering the 90-day investment horizon ChampionX is expected to under-perform the Atea ASA. But the stock apears to be less risky and, when comparing its historical volatility, ChampionX is 4.53 times less risky than Atea ASA. The stock trades about -0.02 of its potential returns per unit of risk. The Atea ASA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,300  in Atea ASA on October 4, 2024 and sell it today you would earn a total of  102.00  from holding Atea ASA or generate 7.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	63.64%
Values	Daily Returns

ChampionX  vs.  Atea ASA

ChampionX

Risk-Adjusted Performance

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Very Weak

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Atea ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atea ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Atea ASA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ChampionX and Atea ASA

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

The idea behind ChampionX and Atea ASA 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.