Correlation Between ATAI Life and Awakn Life

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

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

Diversification Opportunities for ATAI Life and Awakn Life

0.43

Correlation Coefficient

ATAI Life  Awakn Life

Very weak diversification

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

Pair Corralation between ATAI Life and Awakn Life

Given the investment horizon of 90 days ATAI Life is expected to generate 2.02 times less return on investment than Awakn Life. But when comparing it to its historical volatility, ATAI Life Sciences is 1.77 times less risky than Awakn Life. It trades about 0.04 of its potential returns per unit of risk. Awakn Life Sciences is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6.74  in Awakn Life Sciences on September 17, 2024 and sell it today you would lose (0.24) from holding Awakn Life Sciences or give up 3.56% of portfolio value over 90 days.

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

ATAI Life Sciences  vs.  Awakn Life Sciences

ATAI Life Sciences

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATAI Life Sciences are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, ATAI Life may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Awakn Life Sciences

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Awakn Life Sciences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Awakn Life reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATAI Life and Awakn Life

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

The idea behind ATAI Life Sciences and Awakn Life Sciences 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.