Correlation Between Atlas Corp and Search Minerals
Can any of the company-specific risk be diversified away by investing in both Atlas Corp and Search Minerals 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 Search Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Corp and Search Minerals, you can compare the effects of market volatilities on Atlas Corp and Search Minerals 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 Search Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Corp and Search Minerals.
Diversification Opportunities for Atlas Corp and Search Minerals
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atlas and Search is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and Search Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Search Minerals 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 Search Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Search Minerals has no effect on the direction of Atlas Corp i.e., Atlas Corp and Search Minerals go up and down completely randomly.
Pair Corralation between Atlas Corp and Search Minerals
Assuming the 90 days horizon Atlas Corp is expected to under-perform the Search Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Corp is 299.25 times less risky than Search Minerals. The stock trades about -0.04 of its potential returns per unit of risk. The Search Minerals is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1.60 in Search Minerals on August 31, 2024 and sell it today you would lose (0.40) from holding Search Minerals or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Corp vs. Search Minerals
Performance |
| Timeline |
| Atlas Corp |
| Search Minerals |
Atlas Corp and Search Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Corp and Search Minerals
The main advantage of trading using opposite Atlas Corp and Search Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Corp position performs unexpectedly, Search Minerals 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 Search Minerals will offset losses from the drop in Search Minerals' 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 |
| Search Minerals vs. Sassy Resources | Search Minerals vs. Aldebaran Resources | Search Minerals vs. Tamino Minerals | Search Minerals vs. Myriad Uranium 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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