Correlation Between Atlas Consolidated and Alliance Global
Can any of the company-specific risk be diversified away by investing in both Atlas Consolidated and Alliance Global 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 Consolidated and Alliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Consolidated Mining and Alliance Global Group, you can compare the effects of market volatilities on Atlas Consolidated and Alliance Global 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 Consolidated with a short position of Alliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Consolidated and Alliance Global.
Diversification Opportunities for Atlas Consolidated and Alliance Global
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atlas and Alliance is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Consolidated Mining and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group and Atlas Consolidated 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 Consolidated Mining are associated (or correlated) with Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of Atlas Consolidated i.e., Atlas Consolidated and Alliance Global go up and down completely randomly.
Pair Corralation between Atlas Consolidated and Alliance Global
Assuming the 90 days trading horizon Atlas Consolidated Mining is expected to under-perform the Alliance Global. In addition to that, Atlas Consolidated is 1.49 times more volatile than Alliance Global Group. It trades about -0.39 of its total potential returns per unit of risk. Alliance Global Group is currently generating about -0.17 per unit of volatility. If you would invest 921.00 in Alliance Global Group on September 1, 2024 and sell it today you would lose (43.00) from holding Alliance Global Group or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Atlas Consolidated Mining vs. Alliance Global Group
Performance |
| Timeline |
| Atlas Consolidated Mining |
| Alliance Global Group |
Atlas Consolidated and Alliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Consolidated and Alliance Global
The main advantage of trading using opposite Atlas Consolidated and Alliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Consolidated position performs unexpectedly, Alliance Global 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 Alliance Global will offset losses from the drop in Alliance Global's long position.The idea behind Atlas Consolidated Mining and Alliance Global Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Alliance Global vs. GT Capital Holdings | Alliance Global vs. Allhome Corp | Alliance Global vs. Jollibee Foods Corp | Alliance Global vs. LFM Properties Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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