Correlation Between RCM TECHNOLOGIES and Atos SE

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

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

Diversification Opportunities for RCM TECHNOLOGIES and Atos SE

-0.68

Correlation Coefficient

RCM TECHNOLOGIES  Atos SE

Excellent diversification

The 3 months correlation between RCM and Atos is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding RCM TECHNOLOGIES and Atos SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos SE and RCM TECHNOLOGIES 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 RCM TECHNOLOGIES are associated (or correlated) with Atos SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos SE has no effect on the direction of RCM TECHNOLOGIES i.e., RCM TECHNOLOGIES and Atos SE go up and down completely randomly.

Pair Corralation between RCM TECHNOLOGIES and Atos SE

Assuming the 90 days trading horizon RCM TECHNOLOGIES is expected to generate 60.2 times less return on investment than Atos SE. But when comparing it to its historical volatility, RCM TECHNOLOGIES is 55.2 times less risky than Atos SE. It trades about 0.12 of its potential returns per unit of risk. Atos SE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  73.00  in Atos SE on September 23, 2024 and sell it today you would lose (72.79) from holding Atos SE or give up 99.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	88.64%
Values	Daily Returns

RCM TECHNOLOGIES  vs.  Atos SE

RCM TECHNOLOGIES

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RCM TECHNOLOGIES are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, RCM TECHNOLOGIES exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atos SE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atos SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Atos SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RCM TECHNOLOGIES and Atos SE

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

The idea behind RCM TECHNOLOGIES and Atos SE 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 CEOs Directory module to screen CEOs from public companies around the world.