Correlation Between Atlas Engineered and Hammond Power
Can any of the company-specific risk be diversified away by investing in both Atlas Engineered and Hammond Power 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 Atlas Engineered and Hammond Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Engineered Products and Hammond Power Solutions, you can compare the effects of market volatilities on Atlas Engineered and Hammond Power 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 Atlas Engineered with a short position of Hammond Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Engineered and Hammond Power.
Diversification Opportunities for Atlas Engineered and Hammond Power
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Atlas and Hammond is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Engineered Products and Hammond Power Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammond Power Solutions and Atlas Engineered 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 Atlas Engineered Products are associated (or correlated) with Hammond Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammond Power Solutions has no effect on the direction of Atlas Engineered i.e., Atlas Engineered and Hammond Power go up and down completely randomly.
Pair Corralation between Atlas Engineered and Hammond Power
Assuming the 90 days horizon Atlas Engineered Products is expected to under-perform the Hammond Power. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Engineered Products is 1.36 times less risky than Hammond Power. The stock trades about -0.03 of its potential returns per unit of risk. The Hammond Power Solutions is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 15,533 in Hammond Power Solutions on October 12, 2024 and sell it today you would lose (3,811) from holding Hammond Power Solutions or give up 24.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Engineered Products vs. Hammond Power Solutions
Performance |
| Timeline |
| Atlas Engineered Products |
| Hammond Power Solutions |
Atlas Engineered and Hammond Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Engineered and Hammond Power
The main advantage of trading using opposite Atlas Engineered and Hammond Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Engineered position performs unexpectedly, Hammond Power 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 Hammond Power will offset losses from the drop in Hammond Power's long position.| Atlas Engineered vs. Redishred Capital Corp | Atlas Engineered vs. Fab Form Industries | Atlas Engineered vs. Inventronics | Atlas Engineered vs. Caldwell Partners International |
| Hammond Power vs. Hammond Manufacturing | Hammond Power vs. Firan Technology Group | Hammond Power vs. Supremex | Hammond Power vs. Geodrill Limited |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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