Correlation Between ATRYS HEALTH and Carsales

Can any of the company-specific risk be diversified away by investing in both ATRYS HEALTH and Carsales 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 Carsales 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 CarsalesCom, you can compare the effects of market volatilities on ATRYS HEALTH and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRYS HEALTH and Carsales.

Diversification Opportunities for ATRYS HEALTH and Carsales

-0.43

Correlation Coefficient

ATRYS HEALTH  Carsales

Very good diversification

The 3 months correlation between ATRYS and Carsales is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ATRYS HEALTH SA and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of ATRYS HEALTH i.e., ATRYS HEALTH and Carsales go up and down completely randomly.

Pair Corralation between ATRYS HEALTH and Carsales

Assuming the 90 days horizon ATRYS HEALTH SA is expected to under-perform the Carsales. In addition to that, ATRYS HEALTH is 1.59 times more volatile than CarsalesCom. It trades about -0.04 of its total potential returns per unit of risk. CarsalesCom is currently generating about 0.21 per unit of volatility. If you would invest  2,142  in CarsalesCom on September 5, 2024 and sell it today you would earn a total of  418.00  from holding CarsalesCom or generate 19.51% return on investment over 90 days.

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

ATRYS HEALTH SA  vs.  CarsalesCom

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 nearly stable basic indicators, ATRYS HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CarsalesCom

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CarsalesCom are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Carsales reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATRYS HEALTH and Carsales

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

The idea behind ATRYS HEALTH SA and CarsalesCom 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.

Check out your portfolio center.

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.