Correlation Between Atlas Engineered and Trex
Can any of the company-specific risk be diversified away by investing in both Atlas Engineered and Trex 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 Trex 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 Trex Company, you can compare the effects of market volatilities on Atlas Engineered and Trex 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 Trex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Engineered and Trex.
Diversification Opportunities for Atlas Engineered and Trex
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atlas and Trex is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Engineered Products and Trex Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trex Company 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 Trex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trex Company has no effect on the direction of Atlas Engineered i.e., Atlas Engineered and Trex go up and down completely randomly.
Pair Corralation between Atlas Engineered and Trex
Assuming the 90 days horizon Atlas Engineered Products is expected to generate 1.32 times more return on investment than Trex. However, Atlas Engineered is 1.32 times more volatile than Trex Company. It trades about 0.03 of its potential returns per unit of risk. Trex Company is currently generating about 0.03 per unit of risk. If you would invest 69.00 in Atlas Engineered Products on October 25, 2024 and sell it today you would earn a total of 12.00 from holding Atlas Engineered Products or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Engineered Products vs. Trex Company
Performance |
| Timeline |
| Atlas Engineered Products |
| Trex Company |
Atlas Engineered and Trex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Engineered and Trex
The main advantage of trading using opposite Atlas Engineered and Trex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Engineered position performs unexpectedly, Trex 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 Trex will offset losses from the drop in Trex's long position.| Atlas Engineered vs. Travis Perkins PLC | Atlas Engineered vs. Antelope Enterprise Holdings | Atlas Engineered vs. Intelligent Living Application | Atlas Engineered vs. Beacon Roofing Supply |
| Trex vs. Quanex Building Products | Trex vs. Armstrong World Industries | Trex vs. Gibraltar Industries | Trex vs. Apogee Enterprises |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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