Correlation Between Metro Retail and Atok Big

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

By analyzing existing cross correlation between Metro Retail Stores and Atok Big Wedge, you can compare the effects of market volatilities on Metro Retail and Atok Big 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 Metro Retail with a short position of Atok Big. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Atok Big.

Diversification Opportunities for Metro Retail and Atok Big

0.72

Correlation Coefficient

Metro Retail  Atok Big

Poor diversification

The 3 months correlation between Metro and Atok is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Atok Big Wedge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atok Big Wedge and Metro Retail 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 Metro Retail Stores are associated (or correlated) with Atok Big. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atok Big Wedge has no effect on the direction of Metro Retail i.e., Metro Retail and Atok Big go up and down completely randomly.

Pair Corralation between Metro Retail and Atok Big

Assuming the 90 days trading horizon Metro Retail Stores is expected to generate 0.3 times more return on investment than Atok Big. However, Metro Retail Stores is 3.28 times less risky than Atok Big. It trades about -0.03 of its potential returns per unit of risk. Atok Big Wedge is currently generating about -0.09 per unit of risk. If you would invest  122.00  in Metro Retail Stores on April 20, 2025 and sell it today you would lose (5.00) from holding Metro Retail Stores or give up 4.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	65.0%
Values	Daily Returns

Metro Retail Stores  vs.  Atok Big Wedge

Metro Retail Stores

Risk-Adjusted Performance

Very Weak

Over the last 90 days Metro Retail Stores has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Metro Retail is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Atok Big Wedge

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atok Big Wedge has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Metro Retail and Atok Big

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

The idea behind Metro Retail Stores and Atok Big Wedge 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.

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 the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.