Correlation Between Nippon Steel and ATRYS HEALTH

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

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

Diversification Opportunities for Nippon Steel and ATRYS HEALTH

0.11

Correlation Coefficient

Nippon Steel  ATRYS HEALTH

Average diversification

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

Pair Corralation between Nippon Steel and ATRYS HEALTH

Assuming the 90 days trading horizon Nippon Steel is expected to under-perform the ATRYS HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, Nippon Steel is 1.52 times less risky than ATRYS HEALTH. The stock trades about -0.06 of its potential returns per unit of risk. The ATRYS HEALTH SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  293.00  in ATRYS HEALTH SA on September 23, 2024 and sell it today you would earn a total of  8.00  from holding ATRYS HEALTH SA or generate 2.73% return on investment over 90 days.

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

Nippon Steel  vs.  ATRYS HEALTH SA

Nippon Steel

Risk-Adjusted Performance

0 of 100

Very Weak

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

ATRYS HEALTH SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATRYS HEALTH SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ATRYS HEALTH is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nippon Steel and ATRYS HEALTH

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

The idea behind Nippon Steel and ATRYS HEALTH 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.