Correlation Between Atlas Engineered and Latham
Can any of the company-specific risk be diversified away by investing in both Atlas Engineered and Latham 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 Latham 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 Latham Group, you can compare the effects of market volatilities on Atlas Engineered and Latham 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 Latham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Engineered and Latham.
Diversification Opportunities for Atlas Engineered and Latham
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlas and Latham is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Engineered Products and Latham Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latham Group 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 Latham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latham Group has no effect on the direction of Atlas Engineered i.e., Atlas Engineered and Latham go up and down completely randomly.
Pair Corralation between Atlas Engineered and Latham
Assuming the 90 days horizon Atlas Engineered is expected to generate 2.4 times less return on investment than Latham. But when comparing it to its historical volatility, Atlas Engineered Products is 1.7 times less risky than Latham. It trades about 0.04 of its potential returns per unit of risk. Latham Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 325.00 in Latham Group on August 28, 2024 and sell it today you would earn a total of 369.00 from holding Latham Group or generate 113.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Engineered Products vs. Latham Group
Performance |
| Timeline |
| Atlas Engineered Products |
| Latham Group |
Atlas Engineered and Latham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Engineered and Latham
The main advantage of trading using opposite Atlas Engineered and Latham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Engineered position performs unexpectedly, Latham 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 Latham will offset losses from the drop in Latham's long position.| Atlas Engineered vs. Aecom Technology | Atlas Engineered vs. Matrix Service Co | Atlas Engineered vs. MYR Group | Atlas Engineered vs. Fluor |
| Latham vs. Janus International Group | Latham vs. Quanex Building Products | Latham vs. GMS Inc | Latham vs. Gibraltar Industries |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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