Correlation Between ATRESMEDIA and Hercules Capital

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

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

Diversification Opportunities for ATRESMEDIA and Hercules Capital

-0.53

Correlation Coefficient

ATRESMEDIA  Hercules Capital

Excellent diversification

The 3 months correlation between ATRESMEDIA and Hercules is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital and ATRESMEDIA 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 ATRESMEDIA are associated (or correlated) with Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of ATRESMEDIA i.e., ATRESMEDIA and Hercules Capital go up and down completely randomly.

Pair Corralation between ATRESMEDIA and Hercules Capital

Assuming the 90 days trading horizon ATRESMEDIA is expected to generate 0.79 times more return on investment than Hercules Capital. However, ATRESMEDIA is 1.27 times less risky than Hercules Capital. It trades about 0.24 of its potential returns per unit of risk. Hercules Capital is currently generating about -0.02 per unit of risk. If you would invest  419.00  in ATRESMEDIA on December 25, 2024 and sell it today you would earn a total of  102.00  from holding ATRESMEDIA or generate 24.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

ATRESMEDIA  vs.  Hercules Capital

ATRESMEDIA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATRESMEDIA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, ATRESMEDIA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hercules Capital

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ATRESMEDIA and Hercules Capital

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

The idea behind ATRESMEDIA and Hercules Capital 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..