Correlation Between ATS P and IShares SPTSX

Can any of the company-specific risk be diversified away by investing in both ATS P and IShares SPTSX 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 ATS P and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATS P and iShares SPTSX Capped, you can compare the effects of market volatilities on ATS P and IShares SPTSX 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 ATS P with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATS P and IShares SPTSX.

Diversification Opportunities for ATS P and IShares SPTSX

0.43

Correlation Coefficient

ATS P  IShares SPTSX

Very weak diversification

The 3 months correlation between ATS and IShares is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ATS P and iShares SPTSX Capped in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Capped and ATS P 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 ATS P are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX Capped has no effect on the direction of ATS P i.e., ATS P and IShares SPTSX go up and down completely randomly.

Pair Corralation between ATS P and IShares SPTSX

Assuming the 90 days trading horizon ATS P is expected to generate 1.71 times more return on investment than IShares SPTSX. However, ATS P is 1.71 times more volatile than iShares SPTSX Capped. It trades about 0.21 of its potential returns per unit of risk. iShares SPTSX Capped is currently generating about -0.26 per unit of risk. If you would invest  3,608  in ATS P on June 30, 2024 and sell it today you would earn a total of  411.00  from holding ATS P or generate 11.39% return on investment over 90 days.

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

ATS P  vs.  iShares SPTSX Capped

ATS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATS P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

iShares SPTSX Capped

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares SPTSX Capped has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with ATS P and IShares SPTSX

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

The idea behind ATS P and iShares SPTSX Capped 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.