Correlation Between SPTSX Dividend and ATEX Resources

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

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

Diversification Opportunities for SPTSX Dividend and ATEX Resources

0.49

Correlation Coefficient

SPTSX Dividend  ATEX Resources

Very weak diversification

The 3 months correlation between SPTSX and ATEX is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and ATEX Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATEX Resources and SPTSX Dividend 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 SPTSX Dividend Aristocrats are associated (or correlated) with ATEX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATEX Resources has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and ATEX Resources go up and down completely randomly.

Pair Corralation between SPTSX Dividend and ATEX Resources

Assuming the 90 days trading horizon SPTSX Dividend Aristocrats is expected to generate 0.11 times more return on investment than ATEX Resources. However, SPTSX Dividend Aristocrats is 8.82 times less risky than ATEX Resources. It trades about 0.39 of its potential returns per unit of risk. ATEX Resources is currently generating about 0.01 per unit of risk. If you would invest  35,152  in SPTSX Dividend Aristocrats on April 23, 2025 and sell it today you would earn a total of  3,111  from holding SPTSX Dividend Aristocrats or generate 8.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

SPTSX Dividend Aristocrats  vs.  ATEX Resources

Pair Trading with SPTSX Dividend and ATEX Resources

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

The idea behind SPTSX Dividend Aristocrats and ATEX Resources 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.