Correlation Between Atlas Corp and American CuMo
Can any of the company-specific risk be diversified away by investing in both Atlas Corp and American CuMo 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 American CuMo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Corp and American CuMo Mining, you can compare the effects of market volatilities on Atlas Corp and American CuMo 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 American CuMo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Corp and American CuMo.
Diversification Opportunities for Atlas Corp and American CuMo
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atlas and American is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and American CuMo Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American CuMo Mining 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 American CuMo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American CuMo Mining has no effect on the direction of Atlas Corp i.e., Atlas Corp and American CuMo go up and down completely randomly.
Pair Corralation between Atlas Corp and American CuMo
Assuming the 90 days horizon Atlas Corp is expected to generate 60.55 times less return on investment than American CuMo. But when comparing it to its historical volatility, Atlas Corp is 61.73 times less risky than American CuMo. It trades about 0.11 of its potential returns per unit of risk. American CuMo Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3.00 in American CuMo Mining on September 4, 2024 and sell it today you would lose (1.00) from holding American CuMo Mining or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Atlas Corp vs. American CuMo Mining
Performance |
| Timeline |
| Atlas Corp |
| American CuMo Mining |
Atlas Corp and American CuMo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Corp and American CuMo
The main advantage of trading using opposite Atlas Corp and American CuMo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Corp position performs unexpectedly, American CuMo 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 American CuMo will offset losses from the drop in American CuMo's long position.| Atlas Corp vs. Werner Enterprises | Atlas Corp vs. Heartland Express | Atlas Corp vs. Knight Transportation |
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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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