Correlation Between Science Applications and Atos Origin

Can any of the company-specific risk be diversified away by investing in both Science Applications and Atos Origin 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 Science Applications and Atos Origin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Science Applications International and Atos Origin SA, you can compare the effects of market volatilities on Science Applications and Atos Origin 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 Science Applications with a short position of Atos Origin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Applications and Atos Origin.

Diversification Opportunities for Science Applications and Atos Origin

0.27

Correlation Coefficient

Science Applications  Atos Origin

Modest diversification

The 3 months correlation between Science and Atos is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Science Applications Internati and Atos Origin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos Origin SA and Science Applications 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 Science Applications International are associated (or correlated) with Atos Origin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos Origin SA has no effect on the direction of Science Applications i.e., Science Applications and Atos Origin go up and down completely randomly.

Pair Corralation between Science Applications and Atos Origin

Given the investment horizon of 90 days Science Applications International is expected to generate 0.22 times more return on investment than Atos Origin. However, Science Applications International is 4.44 times less risky than Atos Origin. It trades about 0.02 of its potential returns per unit of risk. Atos Origin SA is currently generating about -0.26 per unit of risk. If you would invest  11,046  in Science Applications International on December 29, 2024 and sell it today you would earn a total of  90.00  from holding Science Applications International or generate 0.81% return on investment over 90 days.

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

Science Applications Internati  vs.  Atos Origin SA

Science Applications

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Science Applications International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Science Applications is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Atos Origin SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atos Origin SA 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Science Applications and Atos Origin

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

The idea behind Science Applications International and Atos Origin 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..