Correlation Between Atlantic Coastal and APTMU Old
Can any of the company-specific risk be diversified away by investing in both Atlantic Coastal and APTMU Old 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 Atlantic Coastal and APTMU Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic Coastal Acquisition and APTMU Old, you can compare the effects of market volatilities on Atlantic Coastal and APTMU Old 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 Atlantic Coastal with a short position of APTMU Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Coastal and APTMU Old.
Diversification Opportunities for Atlantic Coastal and APTMU Old
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlantic and APTMU is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Coastal Acquisition and APTMU Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APTMU Old and Atlantic Coastal 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 Atlantic Coastal Acquisition are associated (or correlated) with APTMU Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APTMU Old has no effect on the direction of Atlantic Coastal i.e., Atlantic Coastal and APTMU Old go up and down completely randomly.
Pair Corralation between Atlantic Coastal and APTMU Old
Given the investment horizon of 90 days Atlantic Coastal is expected to generate 1.44 times less return on investment than APTMU Old. In addition to that, Atlantic Coastal is 1.0 times more volatile than APTMU Old. It trades about 0.03 of its total potential returns per unit of risk. APTMU Old is currently generating about 0.05 per unit of volatility. If you would invest 1,013 in APTMU Old on November 2, 2024 and sell it today you would earn a total of 30.00 from holding APTMU Old or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantic Coastal Acquisition vs. APTMU Old
Performance |
| Timeline |
| Atlantic Coastal Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| APTMU Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Atlantic Coastal and APTMU Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic Coastal and APTMU Old
The main advantage of trading using opposite Atlantic Coastal and APTMU Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic Coastal position performs unexpectedly, APTMU Old 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 APTMU Old will offset losses from the drop in APTMU Old's long position.The idea behind Atlantic Coastal Acquisition and APTMU Old 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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