Correlation Between Grow Solutions and ATA Creativity

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

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

Diversification Opportunities for Grow Solutions and ATA Creativity

0.0

Correlation Coefficient

Grow Solutions  ATA Creativity

Pay attention - limited upside

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

Pair Corralation between Grow Solutions and ATA Creativity

Given the investment horizon of 90 days Grow Solutions Holdings is expected to under-perform the ATA Creativity. But the pink sheet apears to be less risky and, when comparing its historical volatility, Grow Solutions Holdings is 1.03 times less risky than ATA Creativity. The pink sheet trades about -0.04 of its potential returns per unit of risk. The ATA Creativity Global is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  144.00  in ATA Creativity Global on October 13, 2024 and sell it today you would lose (49.00) from holding ATA Creativity Global or give up 34.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Grow Solutions Holdings  vs.  ATA Creativity Global

Grow Solutions Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Grow Solutions Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Grow Solutions is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

ATA Creativity Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Grow Solutions and ATA Creativity

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

The idea behind Grow Solutions Holdings and ATA Creativity Global 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.