Correlation Between Atea ASA and CIFI Holdings

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

By analyzing existing cross correlation between Atea ASA and CIFI Holdings Co, you can compare the effects of market volatilities on Atea ASA and CIFI Holdings 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 CIFI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atea ASA and CIFI Holdings.

Diversification Opportunities for Atea ASA and CIFI Holdings

0.22

Correlation Coefficient

Atea ASA  CIFI Holdings

Modest diversification

The 3 months correlation between Atea and CIFI is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Atea ASA and CIFI Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIFI Holdings 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 CIFI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIFI Holdings has no effect on the direction of Atea ASA i.e., Atea ASA and CIFI Holdings go up and down completely randomly.

Pair Corralation between Atea ASA and CIFI Holdings

Assuming the 90 days trading horizon Atea ASA is expected to under-perform the CIFI Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Atea ASA is 8.53 times less risky than CIFI Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The CIFI Holdings Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2.85  in CIFI Holdings Co on December 25, 2024 and sell it today you would lose (0.55) from holding CIFI Holdings Co or give up 19.3% of portfolio value over 90 days.

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

Atea ASA  vs.  CIFI Holdings Co

Atea ASA

Risk-Adjusted Performance

Very Weak

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

CIFI Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CIFI Holdings Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CIFI Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Atea ASA and CIFI Holdings

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

The idea behind Atea ASA and CIFI Holdings Co 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 Global Correlations module to find global opportunities by holding instruments from different markets.