Correlation Between ATMA Participaes and Ishares Msci

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

By analyzing existing cross correlation between ATMA Participaes SA and Ishares Msci Brazil, you can compare the effects of market volatilities on ATMA Participaes and Ishares Msci 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 ATMA Participaes with a short position of Ishares Msci. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATMA Participaes and Ishares Msci.

Diversification Opportunities for ATMA Participaes and Ishares Msci

-0.25

Correlation Coefficient

ATMA Participaes  Ishares Msci

Very good diversification

The 3 months correlation between ATMA and Ishares is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ATMA Participaes SA and Ishares Msci Brazil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Msci Brazil and ATMA Participaes 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 ATMA Participaes SA are associated (or correlated) with Ishares Msci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Msci Brazil has no effect on the direction of ATMA Participaes i.e., ATMA Participaes and Ishares Msci go up and down completely randomly.

Pair Corralation between ATMA Participaes and Ishares Msci

Assuming the 90 days trading horizon ATMA Participaes SA is expected to under-perform the Ishares Msci. In addition to that, ATMA Participaes is 1.41 times more volatile than Ishares Msci Brazil. It trades about -0.18 of its total potential returns per unit of risk. Ishares Msci Brazil is currently generating about -0.25 per unit of volatility. If you would invest  5,344  in Ishares Msci Brazil on September 3, 2024 and sell it today you would lose (232.00) from holding Ishares Msci Brazil or give up 4.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.42%
Values	Daily Returns

ATMA Participaes SA  vs.  Ishares Msci Brazil

ATMA Participaes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATMA Participaes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ATMA Participaes is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ishares Msci Brazil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ishares Msci Brazil has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with ATMA Participaes and Ishares Msci

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

The idea behind ATMA Participaes SA and Ishares Msci Brazil 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.