Correlation Between Aterian and DatChat

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

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

Diversification Opportunities for Aterian and DatChat

0.26

Correlation Coefficient

Aterian  DatChat

Modest diversification

The 3 months correlation between Aterian and DatChat is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and DatChat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DatChat and Aterian 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 Aterian are associated (or correlated) with DatChat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DatChat has no effect on the direction of Aterian i.e., Aterian and DatChat go up and down completely randomly.

Pair Corralation between Aterian and DatChat

Given the investment horizon of 90 days Aterian is expected to under-perform the DatChat. But the stock apears to be less risky and, when comparing its historical volatility, Aterian is 1.02 times less risky than DatChat. The stock trades about -0.16 of its potential returns per unit of risk. The DatChat is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  262.00  in DatChat on May 18, 2025 and sell it today you would lose (37.00) from holding DatChat or give up 14.12% of portfolio value over 90 days.

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

Aterian  vs.  DatChat

Aterian

Risk-Adjusted Performance

Weakest

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

DatChat

Risk-Adjusted Performance

Weakest

Over the last 90 days DatChat 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Aterian and DatChat

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

The idea behind Aterian and DatChat 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 Transaction History module to view history of all your transactions and understand their impact on performance.