Correlation Between Atlas Consolidated and Crown Asia
Can any of the company-specific risk be diversified away by investing in both Atlas Consolidated and Crown Asia 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 Crown Asia 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 Crown Asia Chemicals, you can compare the effects of market volatilities on Atlas Consolidated and Crown Asia 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 Crown Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Consolidated and Crown Asia.
Diversification Opportunities for Atlas Consolidated and Crown Asia
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlas and Crown is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Consolidated Mining and Crown Asia Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Asia Chemicals 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 Crown Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Asia Chemicals has no effect on the direction of Atlas Consolidated i.e., Atlas Consolidated and Crown Asia go up and down completely randomly.
Pair Corralation between Atlas Consolidated and Crown Asia
Assuming the 90 days trading horizon Atlas Consolidated Mining is expected to under-perform the Crown Asia. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Consolidated Mining is 1.03 times less risky than Crown Asia. The stock trades about -0.36 of its potential returns per unit of risk. The Crown Asia Chemicals is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Crown Asia Chemicals on August 29, 2024 and sell it today you would lose (10.00) from holding Crown Asia Chemicals or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Consolidated Mining vs. Crown Asia Chemicals
Performance |
| Timeline |
| Atlas Consolidated Mining |
| Crown Asia Chemicals |
Atlas Consolidated and Crown Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Consolidated and Crown Asia
The main advantage of trading using opposite Atlas Consolidated and Crown Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Consolidated position performs unexpectedly, Crown Asia 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 Crown Asia will offset losses from the drop in Crown Asia's long position.| Atlas Consolidated vs. SM Investments Corp | Atlas Consolidated vs. Lepanto Consolidated Mining | Atlas Consolidated vs. Integrated Micro Electronics | Atlas Consolidated vs. Top Frontier Investment |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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