Correlation Between Beyond and ATRenew

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

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

Diversification Opportunities for Beyond and ATRenew

0.32

Correlation Coefficient

Beyond  ATRenew

Weak diversification

The 3 months correlation between Beyond and ATRenew is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Inc and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and Beyond 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 Beyond Inc are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Beyond i.e., Beyond and ATRenew go up and down completely randomly.

Pair Corralation between Beyond and ATRenew

Given the investment horizon of 90 days Beyond Inc is expected to under-perform the ATRenew. But the stock apears to be less risky and, when comparing its historical volatility, Beyond Inc is 1.95 times less risky than ATRenew. The stock trades about -0.73 of its potential returns per unit of risk. The ATRenew Inc DRC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  184.00  in ATRenew Inc DRC on January 29, 2024 and sell it today you would earn a total of  14.00  from holding ATRenew Inc DRC or generate 7.61% return on investment over 90 days.

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

Beyond Inc  vs.  ATRenew Inc DRC

Beyond Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beyond Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Beyond is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

ATRenew Inc DRC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ATRenew exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Beyond and ATRenew

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

The idea behind Beyond Inc and ATRenew Inc DRC 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.