Correlation Between Tritent International and Atea ASA

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

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

Diversification Opportunities for Tritent International and Atea ASA

1.0

Correlation Coefficient

Tritent International  Atea ASA

No risk reduction

The 3 months correlation between Tritent and Atea is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Tritent International Agricult and Atea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea ASA and Tritent International 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 Tritent International Agriculture are associated (or correlated) with Atea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea ASA has no effect on the direction of Tritent International i.e., Tritent International and Atea ASA go up and down completely randomly.

Pair Corralation between Tritent International and Atea ASA

Given the investment horizon of 90 days Tritent International Agriculture is expected to generate 6.16 times more return on investment than Atea ASA. However, Tritent International is 6.16 times more volatile than Atea ASA. It trades about 0.08 of its potential returns per unit of risk. Atea ASA is currently generating about 0.04 per unit of risk. If you would invest  1.02  in Tritent International Agriculture on October 4, 2024 and sell it today you would earn a total of  7.18  from holding Tritent International Agriculture or generate 703.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	63.81%
Values	Daily Returns

Tritent International Agricult  vs.  Atea ASA

Tritent International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Atea ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atea ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Atea ASA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tritent International and Atea ASA

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

The idea behind Tritent International Agriculture and Atea ASA 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.