Correlation Between Near and ATP

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

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

Diversification Opportunities for Near and ATP

0.51

Correlation Coefficient

Near  ATP

Very weak diversification

The 3 months correlation between Near and ATP is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Near and ATP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATP and Near 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 Near are associated (or correlated) with ATP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATP has no effect on the direction of Near i.e., Near and ATP go up and down completely randomly.

Pair Corralation between Near and ATP

Assuming the 90 days trading horizon Near is expected to under-perform the ATP. In addition to that, Near is 1.57 times more volatile than ATP. It trades about -0.21 of its total potential returns per unit of risk. ATP is currently generating about -0.04 per unit of volatility. If you would invest  0.00  in ATP on March 21, 2025 and sell it today you would lose  0.00  from holding ATP or give up 4.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Near  vs.  ATP

Near

Risk-Adjusted Performance

Very Weak

Over the last 90 days Near has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Near shareholders.

ATP

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ATP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Near and ATP

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

The idea behind Near and ATP 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.