Correlation Between Figeac Aero and ATEME SA

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

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

Diversification Opportunities for Figeac Aero and ATEME SA

0.11

Correlation Coefficient

Figeac Aero  ATEME SA

Average diversification

The 3 months correlation between Figeac and ATEME is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Figeac Aero SA and ATEME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATEME SA and Figeac Aero 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 Figeac Aero SA are associated (or correlated) with ATEME SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATEME SA has no effect on the direction of Figeac Aero i.e., Figeac Aero and ATEME SA go up and down completely randomly.

Pair Corralation between Figeac Aero and ATEME SA

Assuming the 90 days trading horizon Figeac Aero is expected to generate 18.96 times less return on investment than ATEME SA. But when comparing it to its historical volatility, Figeac Aero SA is 2.42 times less risky than ATEME SA. It trades about 0.03 of its potential returns per unit of risk. ATEME SA is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  326.00  in ATEME SA on September 27, 2024 and sell it today you would earn a total of  240.00  from holding ATEME SA or generate 73.62% return on investment over 90 days.

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

Figeac Aero SA  vs.  ATEME SA

Figeac Aero SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Figeac Aero SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Figeac Aero is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ATEME SA

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATEME SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, ATEME SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Figeac Aero and ATEME SA

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

The idea behind Figeac Aero SA and ATEME SA 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.