Correlation Between Atlas Corp and Strategic Metals
Can any of the company-specific risk be diversified away by investing in both Atlas Corp and Strategic Metals 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 Strategic Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Corp and Strategic Metals, you can compare the effects of market volatilities on Atlas Corp and Strategic Metals 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 Strategic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Corp and Strategic Metals.
Diversification Opportunities for Atlas Corp and Strategic Metals
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Atlas and Strategic is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and Strategic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic 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 Strategic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Metals has no effect on the direction of Atlas Corp i.e., Atlas Corp and Strategic Metals go up and down completely randomly.
Pair Corralation between Atlas Corp and Strategic Metals
Assuming the 90 days horizon Atlas Corp is expected to generate 0.09 times more return on investment than Strategic Metals. However, Atlas Corp is 11.76 times less risky than Strategic Metals. It trades about 0.09 of its potential returns per unit of risk. Strategic Metals is currently generating about -0.01 per unit of risk. If you would invest 2,344 in Atlas Corp on September 4, 2024 and sell it today you would earn a total of 166.00 from holding Atlas Corp or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Corp vs. Strategic Metals
Performance |
| Timeline |
| Atlas Corp |
| Strategic Metals |
Atlas Corp and Strategic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Corp and Strategic Metals
The main advantage of trading using opposite Atlas Corp and Strategic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Corp position performs unexpectedly, Strategic Metals 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 Strategic Metals will offset losses from the drop in Strategic Metals' long position.The idea behind Atlas Corp and Strategic Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Strategic Metals vs. Silver Spruce Resources | Strategic Metals vs. First American Silver | Strategic Metals vs. Horizonte Minerals Plc | Strategic Metals vs. Commerce Resources 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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