Correlation Between Castellum and Atos SE

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

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

Diversification Opportunities for Castellum and Atos SE

-0.38

Correlation Coefficient

Castellum  Atos SE

Very good diversification

The 3 months correlation between Castellum and Atos is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Castellum and Atos SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos SE and Castellum 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 Castellum are associated (or correlated) with Atos SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos SE has no effect on the direction of Castellum i.e., Castellum and Atos SE go up and down completely randomly.

Pair Corralation between Castellum and Atos SE

Considering the 90-day investment horizon Castellum is expected to generate 1.76 times more return on investment than Atos SE. However, Castellum is 1.76 times more volatile than Atos SE. It trades about 0.33 of its potential returns per unit of risk. Atos SE is currently generating about 0.08 per unit of risk. If you would invest  34.00  in Castellum on October 9, 2024 and sell it today you would earn a total of  113.00  from holding Castellum or generate 332.35% return on investment over 90 days.

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

Castellum  vs.  Atos SE

Castellum

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Castellum are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Castellum displayed solid returns over the last few months and may actually be approaching a breakup point.

Atos SE

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Atos SE are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Atos SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Castellum and Atos SE

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

The idea behind Castellum and Atos SE 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.