Correlation Between AmerisourceBergen and Atreca

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

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

Diversification Opportunities for AmerisourceBergen and Atreca

0.61

Correlation Coefficient

AmerisourceBergen  Atreca

Poor diversification

The 3 months correlation between AmerisourceBergen and Atreca is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AmerisourceBergen and Atreca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atreca Inc and AmerisourceBergen 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 AmerisourceBergen are associated (or correlated) with Atreca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atreca Inc has no effect on the direction of AmerisourceBergen i.e., AmerisourceBergen and Atreca go up and down completely randomly.

Pair Corralation between AmerisourceBergen and Atreca

Considering the 90-day investment horizon AmerisourceBergen is expected to generate 0.13 times more return on investment than Atreca. However, AmerisourceBergen is 7.7 times less risky than Atreca. It trades about 0.04 of its potential returns per unit of risk. Atreca Inc is currently generating about -0.02 per unit of risk. If you would invest  15,621  in AmerisourceBergen on January 26, 2024 and sell it today you would earn a total of  2,377  from holding AmerisourceBergen or generate 15.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	69.83%
Values	Daily Returns

AmerisourceBergen  vs.  Atreca Inc

AmerisourceBergen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AmerisourceBergen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, AmerisourceBergen is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Atreca Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atreca Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with AmerisourceBergen and Atreca

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

The idea behind AmerisourceBergen and Atreca Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..