Correlation Between Atai Life and EBay

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

Diversification Opportunities for Atai Life and EBay

0.61
  Correlation Coefficient

Poor diversification

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

Pair Corralation between Atai Life and EBay

Given the investment horizon of 90 days Atai Life Sciences is expected to under-perform the EBay. In addition to that, Atai Life is 1.76 times more volatile than EBay Inc. It trades about -0.26 of its total potential returns per unit of risk. EBay Inc is currently generating about -0.29 per unit of volatility. If you would invest  4,445  in EBay Inc on July 1, 2022 and sell it today you would lose (584.00)  from holding EBay Inc or give up 13.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Atai Life Sciences  vs.  EBay Inc

 Performance (%) 
       Timeline  
Atai Life Sciences 
Atai Life Performance
0 of 100
Over the last 90 days Atai Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Atai Life is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Atai Life Price Channel

EBay Inc 
EBay Performance
0 of 100
Over the last 90 days EBay Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

EBay Price Channel

Atai Life and EBay Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Atai Life and EBay

The main advantage of trading using opposite Atai Life and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atai Life position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.
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The idea behind Atai Life Sciences and EBay 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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