Correlation Between Atlas Corp and Kayne Anderson
Can any of the company-specific risk be diversified away by investing in both Atlas Corp and Kayne Anderson 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 Corp and Kayne Anderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Corp and Kayne Anderson MLP, you can compare the effects of market volatilities on Atlas Corp and Kayne Anderson 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 Corp with a short position of Kayne Anderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Corp and Kayne Anderson.
Diversification Opportunities for Atlas Corp and Kayne Anderson
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlas and Kayne is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and Kayne Anderson MLP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson MLP and Atlas Corp 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 Corp are associated (or correlated) with Kayne Anderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kayne Anderson MLP has no effect on the direction of Atlas Corp i.e., Atlas Corp and Kayne Anderson go up and down completely randomly.
Pair Corralation between Atlas Corp and Kayne Anderson
Assuming the 90 days trading horizon Atlas Corp is expected to generate 2.53 times less return on investment than Kayne Anderson. But when comparing it to its historical volatility, Atlas Corp is 1.45 times less risky than Kayne Anderson. It trades about 0.1 of its potential returns per unit of risk. Kayne Anderson MLP is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 705.00 in Kayne Anderson MLP on September 1, 2024 and sell it today you would earn a total of 646.00 from holding Kayne Anderson MLP or generate 91.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Corp vs. Kayne Anderson MLP
Performance |
| Timeline |
| Atlas Corp |
| Kayne Anderson MLP |
Atlas Corp and Kayne Anderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Corp and Kayne Anderson
The main advantage of trading using opposite Atlas Corp and Kayne Anderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Corp position performs unexpectedly, Kayne Anderson 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 Kayne Anderson will offset losses from the drop in Kayne Anderson's long position.The idea behind Atlas Corp and Kayne Anderson MLP 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.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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