Correlation Between Lichen China and Atento SA

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

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

Diversification Opportunities for Lichen China and Atento SA

0.0

Correlation Coefficient

Lichen China  Atento SA

Pay attention - limited upside

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

Pair Corralation between Lichen China and Atento SA

If you would invest (100.00) in Atento SA on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Atento SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lichen China Limited  vs.  Atento SA

Lichen China Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lichen China Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Atento SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Lichen China and Atento SA

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

The idea behind Lichen China Limited and Atento 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.