Correlation Between Atlas Consolidated and LFM Properties
Can any of the company-specific risk be diversified away by investing in both Atlas Consolidated and LFM Properties 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 LFM Properties 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 LFM Properties Corp, you can compare the effects of market volatilities on Atlas Consolidated and LFM Properties 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 LFM Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Consolidated and LFM Properties.
Diversification Opportunities for Atlas Consolidated and LFM Properties
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atlas and LFM is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Consolidated Mining and LFM Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LFM Properties Corp 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 LFM Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LFM Properties Corp has no effect on the direction of Atlas Consolidated i.e., Atlas Consolidated and LFM Properties go up and down completely randomly.
Pair Corralation between Atlas Consolidated and LFM Properties
Assuming the 90 days trading horizon Atlas Consolidated is expected to generate 3.19 times less return on investment than LFM Properties. But when comparing it to its historical volatility, Atlas Consolidated Mining is 4.48 times less risky than LFM Properties. It trades about 0.05 of its potential returns per unit of risk. LFM Properties Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.40 in LFM Properties Corp on September 1, 2024 and sell it today you would lose (1.30) from holding LFM Properties Corp or give up 20.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.37% |
| Values | Daily Returns |
Atlas Consolidated Mining vs. LFM Properties Corp
Performance |
| Timeline |
| Atlas Consolidated Mining |
| LFM Properties Corp |
Atlas Consolidated and LFM Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Consolidated and LFM Properties
The main advantage of trading using opposite Atlas Consolidated and LFM Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Consolidated position performs unexpectedly, LFM Properties 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 LFM Properties will offset losses from the drop in LFM Properties' long position.The idea behind Atlas Consolidated Mining and LFM Properties Corp 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.| LFM Properties vs. Concepcion Industrial Corp | LFM Properties vs. Apex Mining Co | LFM Properties vs. Metropolitan Bank Trust | LFM Properties vs. Philex Mining 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |