Correlation Between DOCDATA and ATRESMEDIA

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

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

Diversification Opportunities for DOCDATA and ATRESMEDIA

0.36

Correlation Coefficient

DOCDATA  ATRESMEDIA

Weak diversification

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

Pair Corralation between DOCDATA and ATRESMEDIA

Assuming the 90 days trading horizon DOCDATA is expected to under-perform the ATRESMEDIA. In addition to that, DOCDATA is 3.7 times more volatile than ATRESMEDIA. It trades about -0.03 of its total potential returns per unit of risk. ATRESMEDIA is currently generating about 0.08 per unit of volatility. If you would invest  274.00  in ATRESMEDIA on October 5, 2024 and sell it today you would earn a total of  153.00  from holding ATRESMEDIA or generate 55.84% return on investment over 90 days.

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

DOCDATA  vs.  ATRESMEDIA

DOCDATA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DOCDATA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ATRESMEDIA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with DOCDATA and ATRESMEDIA

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

The idea behind DOCDATA and ATRESMEDIA 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.