Correlation Between ImagineAR and Atari SA

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

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

Diversification Opportunities for ImagineAR and Atari SA

0.06

Correlation Coefficient

ImagineAR  Atari SA

Significant diversification

The 3 months correlation between ImagineAR and Atari is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ImagineAR and Atari SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atari SA and ImagineAR 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 ImagineAR are associated (or correlated) with Atari SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atari SA has no effect on the direction of ImagineAR i.e., ImagineAR and Atari SA go up and down completely randomly.

Pair Corralation between ImagineAR and Atari SA

Assuming the 90 days horizon ImagineAR is expected to generate 1.53 times more return on investment than Atari SA. However, ImagineAR is 1.53 times more volatile than Atari SA. It trades about 0.09 of its potential returns per unit of risk. Atari SA is currently generating about 0.01 per unit of risk. If you would invest  3.93  in ImagineAR on September 12, 2024 and sell it today you would earn a total of  1.15  from holding ImagineAR or generate 29.26% return on investment over 90 days.

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

ImagineAR  vs.  Atari SA

ImagineAR

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ImagineAR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, ImagineAR reported solid returns over the last few months and may actually be approaching a breakup point.

Atari SA

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with ImagineAR and Atari SA

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

The idea behind ImagineAR and Atari SA 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.