Correlation Between Atreyu Capital and Peninsula

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

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

Diversification Opportunities for Atreyu Capital and Peninsula

0.93

Correlation Coefficient

Atreyu Capital  Peninsula

Almost no diversification

The 3 months correlation between Atreyu and Peninsula is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Atreyu Capital Markets and Peninsula Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Group and Atreyu Capital 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 Atreyu Capital Markets are associated (or correlated) with Peninsula. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Group has no effect on the direction of Atreyu Capital i.e., Atreyu Capital and Peninsula go up and down completely randomly.

Pair Corralation between Atreyu Capital and Peninsula

Assuming the 90 days trading horizon Atreyu Capital is expected to generate 1.1 times less return on investment than Peninsula. In addition to that, Atreyu Capital is 1.06 times more volatile than Peninsula Group. It trades about 0.36 of its total potential returns per unit of risk. Peninsula Group is currently generating about 0.42 per unit of volatility. If you would invest  16,392  in Peninsula Group on September 16, 2024 and sell it today you would earn a total of  5,388  from holding Peninsula Group or generate 32.87% return on investment over 90 days.

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

Atreyu Capital Markets  vs.  Peninsula Group

Atreyu Capital Markets

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Atreyu Capital Markets are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Atreyu Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Peninsula Group

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Peninsula Group are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Peninsula sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atreyu Capital and Peninsula

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

The idea behind Atreyu Capital Markets and Peninsula Group 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.