Correlation Between Dividend and ATCO

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

By analyzing existing cross correlation between Dividend 15 Split and ATCO, you can compare the effects of market volatilities on Dividend and ATCO 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 Dividend with a short position of ATCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dividend and ATCO.

Diversification Opportunities for Dividend and ATCO

0.87

Correlation Coefficient

Dividend  ATCO

Very poor diversification

The 3 months correlation between Dividend and ATCO is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dividend 15 Split and ATCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATCO and Dividend 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 Dividend 15 Split are associated (or correlated) with ATCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATCO has no effect on the direction of Dividend i.e., Dividend and ATCO go up and down completely randomly.

Pair Corralation between Dividend and ATCO

Assuming the 90 days horizon Dividend 15 Split is expected to generate 1.09 times more return on investment than ATCO. However, Dividend is 1.09 times more volatile than ATCO. It trades about 0.42 of its potential returns per unit of risk. ATCO is currently generating about 0.14 per unit of risk. If you would invest  503.00  in Dividend 15 Split on September 4, 2024 and sell it today you would earn a total of  150.00  from holding Dividend 15 Split or generate 29.82% return on investment over 90 days.

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

Dividend 15 Split  vs.  ATCO

Dividend 15 Split

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dividend displayed solid returns over the last few months and may actually be approaching a breakup point.

ATCO

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATCO are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, ATCO may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dividend and ATCO

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

The idea behind Dividend 15 Split and ATCO 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.