Correlation Between Atlas Corp and CMC Metals
Can any of the company-specific risk be diversified away by investing in both Atlas Corp and CMC Metals 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 CMC Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Corp and CMC Metals, you can compare the effects of market volatilities on Atlas Corp and CMC Metals 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 CMC Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Corp and CMC Metals.
Diversification Opportunities for Atlas Corp and CMC Metals
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Atlas and CMC is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and CMC Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMC Metals 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 CMC Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMC Metals has no effect on the direction of Atlas Corp i.e., Atlas Corp and CMC Metals go up and down completely randomly.
Pair Corralation between Atlas Corp and CMC Metals
Assuming the 90 days horizon Atlas Corp is expected to under-perform the CMC Metals. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Corp is 164.76 times less risky than CMC Metals. The stock trades about -0.11 of its potential returns per unit of risk. The CMC Metals is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2.00 in CMC Metals on September 13, 2024 and sell it today you would lose (0.24) from holding CMC Metals or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Corp vs. CMC Metals
Performance |
| Timeline |
| Atlas Corp |
| CMC Metals |
Atlas Corp and CMC Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Corp and CMC Metals
The main advantage of trading using opposite Atlas Corp and CMC Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Corp position performs unexpectedly, CMC Metals 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 CMC Metals will offset losses from the drop in CMC Metals' long position.| Atlas Corp vs. Harrow Health 8625 | Atlas Corp vs. Babcock Wilcox Enterprises, | Atlas Corp vs. B Riley Financial | Atlas Corp vs. Oxford Lane Capital |
| CMC Metals vs. Bravo Mining Corp | CMC Metals vs. Southern Silver Exploration | CMC Metals vs. AbraSilver Resource Corp | CMC Metals vs. Gatos Silver |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |