Correlation Between Atea ASA and Gateway Real
Can any of the company-specific risk be diversified away by investing in both Atea ASA and Gateway Real 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 Atea ASA and Gateway Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atea ASA and Gateway Real Estate, you can compare the effects of market volatilities on Atea ASA and Gateway Real 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 Atea ASA with a short position of Gateway Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atea ASA and Gateway Real.
Diversification Opportunities for Atea ASA and Gateway Real
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atea and Gateway is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Atea ASA and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate and Atea ASA 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 Atea ASA are associated (or correlated) with Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of Atea ASA i.e., Atea ASA and Gateway Real go up and down completely randomly.
Pair Corralation between Atea ASA and Gateway Real
Assuming the 90 days trading horizon Atea ASA is expected to generate 1.27 times less return on investment than Gateway Real. But when comparing it to its historical volatility, Atea ASA is 2.62 times less risky than Gateway Real. It trades about 0.11 of its potential returns per unit of risk. Gateway Real Estate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Gateway Real Estate on September 24, 2024 and sell it today you would earn a total of 4.00 from holding Gateway Real Estate or generate 10.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 97.06% |
Values | Daily Returns |
Atea ASA vs. Gateway Real Estate
Performance |
Timeline |
Atea ASA |
Gateway Real Estate |
Atea ASA and Gateway Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Atea ASA and Gateway Real
The main advantage of trading using opposite Atea ASA and Gateway Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atea ASA position performs unexpectedly, Gateway Real 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 Gateway Real will offset losses from the drop in Gateway Real's long position.The idea behind Atea ASA and Gateway Real Estate 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.Gateway Real vs. Deutsche Wohnen SE | Gateway Real vs. Gateway Real Estate | Gateway Real vs. TIMES CHINA HLDGS | Gateway Real vs. LANDSEA HOMES P |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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