Correlation Between Atea ASA and MOBILE FACTORY

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

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

Diversification Opportunities for Atea ASA and MOBILE FACTORY

0.73

Correlation Coefficient

Atea ASA  MOBILE FACTORY

Poor diversification

The 3 months correlation between Atea and MOBILE is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Atea ASA and MOBILE FACTORY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOBILE FACTORY INC and Atea ASA 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 Atea ASA are associated (or correlated) with MOBILE FACTORY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOBILE FACTORY INC has no effect on the direction of Atea ASA i.e., Atea ASA and MOBILE FACTORY go up and down completely randomly.

Pair Corralation between Atea ASA and MOBILE FACTORY

Assuming the 90 days trading horizon Atea ASA is expected to generate 0.98 times more return on investment than MOBILE FACTORY. However, Atea ASA is 1.02 times less risky than MOBILE FACTORY. It trades about 0.05 of its potential returns per unit of risk. MOBILE FACTORY INC is currently generating about -0.07 per unit of risk. If you would invest  1,186  in Atea ASA on October 10, 2024 and sell it today you would earn a total of  12.00  from holding Atea ASA or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

Atea ASA  vs.  MOBILE FACTORY INC

Atea ASA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atea ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Atea ASA exhibited solid returns over the last few months and may actually be approaching a breakup point.

MOBILE FACTORY INC

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Atea ASA and MOBILE FACTORY

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

The idea behind Atea ASA and MOBILE FACTORY INC 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.