Correlation Between Atai Life and Northwest Bancshares

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Can any of the company-specific risk be diversified away by investing in both Atai Life and Northwest Bancshares 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 Northwest Bancshares 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 Northwest Bancshares, you can compare the effects of market volatilities on Atai Life and Northwest Bancshares 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 Northwest Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atai Life and Northwest Bancshares.

Diversification Opportunities for Atai Life and Northwest Bancshares

0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Atai Life and Northwest is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Atai Life Sciences and Northwest Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northwest Bancshares 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 Northwest Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northwest Bancshares has no effect on the direction of Atai Life i.e., Atai Life and Northwest Bancshares go up and down completely randomly.

Pair Corralation between Atai Life and Northwest Bancshares

Given the investment horizon of 90 days Atai Life Sciences is expected to under-perform the Northwest Bancshares. In addition to that, Atai Life is 2.89 times more volatile than Northwest Bancshares. It trades about -0.34 of its total potential returns per unit of risk. Northwest Bancshares is currently generating about -0.1 per unit of volatility. If you would invest  1,415  in Northwest Bancshares on June 30, 2022 and sell it today you would lose (46.00)  from holding Northwest Bancshares or give up 3.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Atai Life Sciences  vs.  Northwest Bancshares

 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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Atai Life Price Channel

Northwest Bancshares 
Northwest Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Northwest Bancshares are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, Northwest Bancshares may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Northwest Price Channel

Atai Life and Northwest Bancshares Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Atai Life and Northwest Bancshares

The main advantage of trading using opposite Atai Life and Northwest Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atai Life position performs unexpectedly, Northwest Bancshares 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 Northwest Bancshares will offset losses from the drop in Northwest Bancshares' long position.
Atai Life vs. Clearwater Paper Corp
The idea behind Atai Life Sciences and Northwest Bancshares 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.
Northwest Bancshares vs. Kibush Capital Corp
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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