Correlation Between Atlas Corp and OceanaGold
Can any of the company-specific risk be diversified away by investing in both Atlas Corp and OceanaGold 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 OceanaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Corp and OceanaGold, you can compare the effects of market volatilities on Atlas Corp and OceanaGold 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 OceanaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Corp and OceanaGold.
Diversification Opportunities for Atlas Corp and OceanaGold
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlas and OceanaGold is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold 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 OceanaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanaGold has no effect on the direction of Atlas Corp i.e., Atlas Corp and OceanaGold go up and down completely randomly.
Pair Corralation between Atlas Corp and OceanaGold
Assuming the 90 days horizon Atlas Corp is expected to under-perform the OceanaGold. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Corp is 8.16 times less risky than OceanaGold. The stock trades about -0.05 of its potential returns per unit of risk. The OceanaGold is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 279.00 in OceanaGold on September 5, 2024 and sell it today you would earn a total of 38.00 from holding OceanaGold or generate 13.62% 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. OceanaGold
Performance |
| Timeline |
| Atlas Corp |
| OceanaGold |
Atlas Corp and OceanaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Corp and OceanaGold
The main advantage of trading using opposite Atlas Corp and OceanaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Corp position performs unexpectedly, OceanaGold 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 OceanaGold will offset losses from the drop in OceanaGold'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 |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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