Correlation Between Atlas Corp and East Africa
Can any of the company-specific risk be diversified away by investing in both Atlas Corp and East Africa 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 East Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Corp and East Africa Metals, you can compare the effects of market volatilities on Atlas Corp and East Africa 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 East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Corp and East Africa.
Diversification Opportunities for Atlas Corp and East Africa
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Atlas and East is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and East Africa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Africa 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 East Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Africa Metals has no effect on the direction of Atlas Corp i.e., Atlas Corp and East Africa go up and down completely randomly.
Pair Corralation between Atlas Corp and East Africa
Assuming the 90 days horizon Atlas Corp is expected to generate 53.64 times less return on investment than East Africa. But when comparing it to its historical volatility, Atlas Corp is 69.86 times less risky than East Africa. It trades about 0.09 of its potential returns per unit of risk. East Africa Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8.22 in East Africa Metals on September 12, 2024 and sell it today you would earn a total of 2.78 from holding East Africa Metals or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Atlas Corp vs. East Africa Metals
Performance |
| Timeline |
| Atlas Corp |
| East Africa Metals |
Atlas Corp and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Corp and East Africa
The main advantage of trading using opposite Atlas Corp and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Corp position performs unexpectedly, East Africa 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 East Africa will offset losses from the drop in East Africa's 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 |
| East Africa vs. Advantage Solutions | East Africa vs. Atlas Corp | East Africa vs. PureCycle Technologies | East Africa vs. WM Technology |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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