Correlation Between Atlantic Energy and All American
Can any of the company-specific risk be diversified away by investing in both Atlantic Energy and All American 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 Energy and All American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic Energy Solutions and All American Gld, you can compare the effects of market volatilities on Atlantic Energy and All American 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 Energy with a short position of All American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Energy and All American.
Diversification Opportunities for Atlantic Energy and All American
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlantic and All is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Energy Solutions and All American Gld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All American Gld and Atlantic Energy 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 Energy Solutions are associated (or correlated) with All American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All American Gld has no effect on the direction of Atlantic Energy i.e., Atlantic Energy and All American go up and down completely randomly.
Pair Corralation between Atlantic Energy and All American
Given the investment horizon of 90 days Atlantic Energy Solutions is expected to generate 1.32 times more return on investment than All American. However, Atlantic Energy is 1.32 times more volatile than All American Gld. It trades about 0.09 of its potential returns per unit of risk. All American Gld is currently generating about 0.08 per unit of risk. If you would invest 2.67 in Atlantic Energy Solutions on September 2, 2024 and sell it today you would lose (1.09) from holding Atlantic Energy Solutions or give up 40.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Atlantic Energy Solutions vs. All American Gld
Performance |
| Timeline |
| Atlantic Energy Solutions |
| All American Gld |
Atlantic Energy and All American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic Energy and All American
The main advantage of trading using opposite Atlantic Energy and All American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic Energy position performs unexpectedly, All American 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 All American will offset losses from the drop in All American's long position.| Atlantic Energy vs. Simulated Environmen | Atlantic Energy vs. Mundus Group | Atlantic Energy vs. Xtra Energy Corp |
| All American vs. American Leisure Holdings | All American vs. Supurva Healthcare Group | All American vs. China Health Management | All American vs. Embrace Change Acquisition |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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