Correlation Between AptarGroup and ATRION

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

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

Diversification Opportunities for AptarGroup and ATRION

0.71

Correlation Coefficient

AptarGroup  ATRION

Poor diversification

The 3 months correlation between AptarGroup and ATRION is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and ATRION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRION and AptarGroup 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 AptarGroup are associated (or correlated) with ATRION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRION has no effect on the direction of AptarGroup i.e., AptarGroup and ATRION go up and down completely randomly.

Pair Corralation between AptarGroup and ATRION

Considering the 90-day investment horizon AptarGroup is expected to generate 2.77 times less return on investment than ATRION. But when comparing it to its historical volatility, AptarGroup is 4.27 times less risky than ATRION. It trades about 0.09 of its potential returns per unit of risk. ATRION is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  40,880  in ATRION on February 1, 2024 and sell it today you would earn a total of  1,449  from holding ATRION or generate 3.54% return on investment over 90 days.

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

AptarGroup  vs.  ATRION

AptarGroup

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, AptarGroup may actually be approaching a critical reversion point that can send shares even higher in June 2024.

ATRION

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATRION are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, ATRION demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AptarGroup and ATRION

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

The idea behind AptarGroup and ATRION 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.