Correlation Between Atrium Mortgage and Firm Capital
Can any of the company-specific risk be diversified away by investing in both Atrium Mortgage and Firm Capital 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 Atrium Mortgage and Firm Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atrium Mortgage Investment and Firm Capital Mortgage, you can compare the effects of market volatilities on Atrium Mortgage and Firm Capital 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 Atrium Mortgage with a short position of Firm Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atrium Mortgage and Firm Capital.
Diversification Opportunities for Atrium Mortgage and Firm Capital
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Atrium and Firm is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Mortgage Investment and Firm Capital Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firm Capital Mortgage and Atrium Mortgage 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 Atrium Mortgage Investment are associated (or correlated) with Firm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firm Capital Mortgage has no effect on the direction of Atrium Mortgage i.e., Atrium Mortgage and Firm Capital go up and down completely randomly.
Pair Corralation between Atrium Mortgage and Firm Capital
Assuming the 90 days horizon Atrium Mortgage is expected to generate 1.8 times less return on investment than Firm Capital. But when comparing it to its historical volatility, Atrium Mortgage Investment is 1.2 times less risky than Firm Capital. It trades about 0.09 of its potential returns per unit of risk. Firm Capital Mortgage is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,146 in Firm Capital Mortgage on August 28, 2024 and sell it today you would earn a total of 26.00 from holding Firm Capital Mortgage or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atrium Mortgage Investment vs. Firm Capital Mortgage
Performance |
| Timeline |
| Atrium Mortgage Inve |
| Firm Capital Mortgage |
Atrium Mortgage and Firm Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atrium Mortgage and Firm Capital
The main advantage of trading using opposite Atrium Mortgage and Firm Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atrium Mortgage position performs unexpectedly, Firm Capital 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 Firm Capital will offset losses from the drop in Firm Capital's long position.| Atrium Mortgage vs. Timbercreek Financial Corp | Atrium Mortgage vs. Firm Capital Mortgage | Atrium Mortgage vs. MCAN Mortgage | Atrium Mortgage vs. First National Financial |
| Firm Capital vs. Senvest Capital | Firm Capital vs. Fairfax Financial Holdings | Firm Capital vs. Bank of Montreal | Firm Capital vs. Bank of Montreal |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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