Correlation Between Atlas Corp and KWG Resources
Can any of the company-specific risk be diversified away by investing in both Atlas Corp and KWG Resources 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 KWG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Corp and KWG Resources, you can compare the effects of market volatilities on Atlas Corp and KWG Resources 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 KWG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Corp and KWG Resources.
Diversification Opportunities for Atlas Corp and KWG Resources
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atlas and KWG is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and KWG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWG Resources 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 KWG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWG Resources has no effect on the direction of Atlas Corp i.e., Atlas Corp and KWG Resources go up and down completely randomly.
Pair Corralation between Atlas Corp and KWG Resources
Assuming the 90 days horizon Atlas Corp is expected to generate 29.74 times less return on investment than KWG Resources. But when comparing it to its historical volatility, Atlas Corp is 38.26 times less risky than KWG Resources. It trades about 0.1 of its potential returns per unit of risk. KWG Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.80 in KWG Resources on August 29, 2024 and sell it today you would earn a total of 0.25 from holding KWG Resources or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Corp vs. KWG Resources
Performance |
| Timeline |
| Atlas Corp |
| KWG Resources |
Atlas Corp and KWG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Corp and KWG Resources
The main advantage of trading using opposite Atlas Corp and KWG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Corp position performs unexpectedly, KWG Resources 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 KWG Resources will offset losses from the drop in KWG Resources' long position.| Atlas Corp vs. Knight Transportation | Atlas Corp vs. Universal Logistics Holdings | Atlas Corp vs. Heartland Express | Atlas Corp vs. Schneider National |
| KWG Resources vs. Ascendant Resources | KWG Resources vs. Cantex Mine Development | KWG Resources vs. Amarc Resources | KWG Resources vs. Sterling Metals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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