Correlation Between Vale SA and Atrys Health

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

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

Diversification Opportunities for Vale SA and Atrys Health

-0.42

Correlation Coefficient

Vale SA  Atrys Health

Very good diversification

The 3 months correlation between Vale and Atrys is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vale SA and Atrys Health SL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrys Health SL and Vale SA 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 Vale SA are associated (or correlated) with Atrys Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrys Health SL has no effect on the direction of Vale SA i.e., Vale SA and Atrys Health go up and down completely randomly.

Pair Corralation between Vale SA and Atrys Health

Assuming the 90 days trading horizon Vale SA is expected to generate 1.99 times more return on investment than Atrys Health. However, Vale SA is 1.99 times more volatile than Atrys Health SL. It trades about 0.07 of its potential returns per unit of risk. Atrys Health SL is currently generating about -0.11 per unit of risk. If you would invest  840.00  in Vale SA on December 29, 2024 and sell it today you would earn a total of  106.00  from holding Vale SA or generate 12.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Vale SA  vs.  Atrys Health SL

Vale SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vale SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Vale SA displayed solid returns over the last few months and may actually be approaching a breakup point.

Atrys Health SL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atrys Health SL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Vale SA and Atrys Health

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

The idea behind Vale SA and Atrys Health SL 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.