Correlation Between Seiko Epson and Atreca

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Can any of the company-specific risk be diversified away by investing in both Seiko Epson 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 Seiko Epson and Atreca into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seiko Epson Corp and Atreca Inc, you can compare the effects of market volatilities on Seiko Epson 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 Seiko Epson with a short position of Atreca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seiko Epson and Atreca.

Diversification Opportunities for Seiko Epson and Atreca

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Seiko and Atreca is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Seiko Epson Corp and Atreca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atreca Inc and Seiko Epson 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 Seiko Epson Corp 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 Seiko Epson i.e., Seiko Epson and Atreca go up and down completely randomly.

Pair Corralation between Seiko Epson and Atreca

Assuming the 90 days horizon Seiko Epson Corp is expected to generate 0.21 times more return on investment than Atreca. However, Seiko Epson Corp is 4.69 times less risky than Atreca. It trades about -0.04 of its potential returns per unit of risk. Atreca Inc is currently generating about -0.12 per unit of risk. If you would invest  686.00  in Seiko Epson Corp on December 20, 2022 and sell it today you would lose (8.00)  from holding Seiko Epson Corp or give up 1.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Seiko Epson Corp  vs.  Atreca Inc

 Performance (%) 
       Timeline  
Seiko Epson Corp 

Seiko Performance

0 of 100

Over the last 90 days Seiko Epson Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Atreca Inc 

Atreca Performance

9 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Atreca Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Atreca disclosed solid returns over the last few months and may actually be approaching a breakup point.

Seiko Epson and Atreca Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Seiko Epson and Atreca

The main advantage of trading using opposite Seiko Epson and Atreca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seiko Epson 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.
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The idea behind Seiko Epson Corp 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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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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