Correlation Between Atlas Corp and Sarama Resources
Can any of the company-specific risk be diversified away by investing in both Atlas Corp and Sarama 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 Sarama 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 Sarama Resources, you can compare the effects of market volatilities on Atlas Corp and Sarama 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 Sarama Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Corp and Sarama Resources.
Diversification Opportunities for Atlas Corp and Sarama Resources
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlas and Sarama is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and Sarama Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarama 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 Sarama Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarama Resources has no effect on the direction of Atlas Corp i.e., Atlas Corp and Sarama Resources go up and down completely randomly.
Pair Corralation between Atlas Corp and Sarama Resources
Assuming the 90 days horizon Atlas Corp is expected to generate 0.04 times more return on investment than Sarama Resources. However, Atlas Corp is 27.41 times less risky than Sarama Resources. It trades about -0.05 of its potential returns per unit of risk. Sarama Resources is currently generating about -0.06 per unit of risk. If you would invest 2,517 in Atlas Corp on September 5, 2024 and sell it today you would lose (9.00) from holding Atlas Corp or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Corp vs. Sarama Resources
Performance |
| Timeline |
| Atlas Corp |
| Sarama Resources |
Atlas Corp and Sarama Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Corp and Sarama Resources
The main advantage of trading using opposite Atlas Corp and Sarama Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Corp position performs unexpectedly, Sarama 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 Sarama Resources will offset losses from the drop in Sarama Resources' 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 |
| Sarama Resources vs. Rupert Resources | Sarama Resources vs. Maritime Resources Corp | Sarama Resources vs. Abcourt Mines | Sarama Resources vs. Cerrado Gold |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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