Correlation Between Hotelim Socit and ATEME SA

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

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

Diversification Opportunities for Hotelim Socit and ATEME SA

-0.74

Correlation Coefficient

Hotelim Socit  ATEME SA

Pay attention - limited upside

The 3 months correlation between Hotelim and ATEME is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hotelim Socit Anonyme and ATEME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATEME SA and Hotelim Socit 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 Hotelim Socit Anonyme are associated (or correlated) with ATEME SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATEME SA has no effect on the direction of Hotelim Socit i.e., Hotelim Socit and ATEME SA go up and down completely randomly.

Pair Corralation between Hotelim Socit and ATEME SA

Assuming the 90 days trading horizon Hotelim Socit Anonyme is expected to under-perform the ATEME SA. But the stock apears to be less risky and, when comparing its historical volatility, Hotelim Socit Anonyme is 4.45 times less risky than ATEME SA. The stock trades about -0.16 of its potential returns per unit of risk. The ATEME SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  395.00  in ATEME SA on October 24, 2024 and sell it today you would earn a total of  193.00  from holding ATEME SA or generate 48.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Hotelim Socit Anonyme  vs.  ATEME SA

Hotelim Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hotelim Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

ATEME SA

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATEME SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, ATEME SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hotelim Socit and ATEME SA

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

The idea behind Hotelim Socit Anonyme and ATEME 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 Stocks Directory module to find actively traded stocks across global markets.