Correlation Between ATRYS HEALTH and Big 5

Can any of the company-specific risk be diversified away by investing in both ATRYS HEALTH and Big 5 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 ATRYS HEALTH and Big 5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATRYS HEALTH SA and Big 5 Sporting, you can compare the effects of market volatilities on ATRYS HEALTH and Big 5 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 ATRYS HEALTH with a short position of Big 5. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRYS HEALTH and Big 5.

Diversification Opportunities for ATRYS HEALTH and Big 5

0.61

Correlation Coefficient

ATRYS HEALTH  Big 5

Poor diversification

The 3 months correlation between ATRYS and Big is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ATRYS HEALTH SA and Big 5 Sporting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big 5 Sporting and ATRYS HEALTH 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 ATRYS HEALTH SA are associated (or correlated) with Big 5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big 5 Sporting has no effect on the direction of ATRYS HEALTH i.e., ATRYS HEALTH and Big 5 go up and down completely randomly.

Pair Corralation between ATRYS HEALTH and Big 5

Assuming the 90 days horizon ATRYS HEALTH SA is expected to under-perform the Big 5. But the stock apears to be less risky and, when comparing its historical volatility, ATRYS HEALTH SA is 1.61 times less risky than Big 5. The stock trades about -0.09 of its potential returns per unit of risk. The Big 5 Sporting is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  156.00  in Big 5 Sporting on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Big 5 Sporting or generate 0.64% return on investment over 90 days.

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

ATRYS HEALTH SA  vs.  Big 5 Sporting

ATRYS HEALTH SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATRYS HEALTH SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Big 5 Sporting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Big 5 Sporting has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Big 5 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ATRYS HEALTH and Big 5

The main advantage of trading using opposite ATRYS HEALTH and Big 5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRYS HEALTH position performs unexpectedly, Big 5 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 Big 5 will offset losses from the drop in Big 5's long position.

The idea behind ATRYS HEALTH SA and Big 5 Sporting 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.