Correlation Between Atreyu Capital and Tamar Petroleum

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

Diversification Opportunities for Atreyu Capital and Tamar Petroleum

0.94

Correlation Coefficient

Atreyu Capital  Tamar Petroleum

Almost no diversification

The 3 months correlation between Atreyu and Tamar is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Atreyu Capital Markets and Tamar Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamar Petroleum 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 Tamar Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamar Petroleum has no effect on the direction of Atreyu Capital i.e., Atreyu Capital and Tamar Petroleum go up and down completely randomly.

Pair Corralation between Atreyu Capital and Tamar Petroleum

Assuming the 90 days trading horizon Atreyu Capital Markets is expected to generate 0.76 times more return on investment than Tamar Petroleum. However, Atreyu Capital Markets is 1.32 times less risky than Tamar Petroleum. It trades about 0.41 of its potential returns per unit of risk. Tamar Petroleum is currently generating about 0.22 per unit of risk. If you would invest  529,616  in Atreyu Capital Markets on September 24, 2024 and sell it today you would earn a total of  173,084  from holding Atreyu Capital Markets or generate 32.68% 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.  Tamar Petroleum

Atreyu Capital Markets

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Atreyu Capital Markets are ranked lower than 32 (%) 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.

Tamar Petroleum

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tamar Petroleum are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Tamar Petroleum sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atreyu Capital and Tamar Petroleum

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

The idea behind Atreyu Capital Markets and Tamar Petroleum 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.