Correlation Between Xilam Animation and ATEME SA

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

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

Diversification Opportunities for Xilam Animation and ATEME SA

-0.41

Correlation Coefficient

Xilam Animation  ATEME SA

Very good diversification

The 3 months correlation between Xilam and ATEME is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Xilam Animation and ATEME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATEME SA and Xilam Animation 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 Xilam Animation 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 Xilam Animation i.e., Xilam Animation and ATEME SA go up and down completely randomly.

Pair Corralation between Xilam Animation and ATEME SA

Assuming the 90 days trading horizon Xilam Animation is expected to generate 3.33 times less return on investment than ATEME SA. But when comparing it to its historical volatility, Xilam Animation is 2.43 times less risky than ATEME SA. It trades about 0.07 of its potential returns per unit of risk. ATEME SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  560.00  in ATEME SA on October 15, 2024 and sell it today you would earn a total of  28.00  from holding ATEME SA or generate 5.0% return on investment over 90 days.

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

Xilam Animation  vs.  ATEME SA

Xilam Animation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xilam Animation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ATEME SA

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATEME SA are ranked lower than 22 (%) 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 Xilam Animation and ATEME SA

The main advantage of trading using opposite Xilam Animation and ATEME SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilam Animation 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 Xilam Animation 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.