Correlation Between Perla Group and ATWEC Technologies

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

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

Diversification Opportunities for Perla Group and ATWEC Technologies

0.57

Correlation Coefficient

Perla Group  ATWEC Technologies

Very weak diversification

The 3 months correlation between Perla and ATWEC is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Perla Group International and ATWEC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATWEC Technologies and Perla Group 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 Perla Group International are associated (or correlated) with ATWEC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATWEC Technologies has no effect on the direction of Perla Group i.e., Perla Group and ATWEC Technologies go up and down completely randomly.

Pair Corralation between Perla Group and ATWEC Technologies

If you would invest  0.40  in ATWEC Technologies on October 13, 2024 and sell it today you would lose (0.30) from holding ATWEC Technologies or give up 75.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.69%
Values	Daily Returns

Perla Group International  vs.  ATWEC Technologies

Perla Group International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perla Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Perla Group is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

ATWEC Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATWEC Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, ATWEC Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perla Group and ATWEC Technologies

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

The idea behind Perla Group International and ATWEC Technologies 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.