Correlation Between Atlas Insurance and Atlas Battery
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and Atlas Battery 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 Insurance and Atlas Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and Atlas Battery, you can compare the effects of market volatilities on Atlas Insurance and Atlas Battery 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 Insurance with a short position of Atlas Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and Atlas Battery.
Diversification Opportunities for Atlas Insurance and Atlas Battery
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlas and Atlas is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and Atlas Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Battery and Atlas Insurance 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 Insurance are associated (or correlated) with Atlas Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Battery has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and Atlas Battery go up and down completely randomly.
Pair Corralation between Atlas Insurance and Atlas Battery
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 1.27 times less return on investment than Atlas Battery. But when comparing it to its historical volatility, Atlas Insurance is 2.01 times less risky than Atlas Battery. It trades about 0.14 of its potential returns per unit of risk. Atlas Battery is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 23,686 in Atlas Battery on September 12, 2024 and sell it today you would earn a total of 16,212 from holding Atlas Battery or generate 68.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.44% |
| Values | Daily Returns |
Atlas Insurance vs. Atlas Battery
Performance |
| Timeline |
| Atlas Insurance |
| Atlas Battery |
Atlas Insurance and Atlas Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and Atlas Battery
The main advantage of trading using opposite Atlas Insurance and Atlas Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, Atlas Battery 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 Atlas Battery will offset losses from the drop in Atlas Battery's long position.| Atlas Insurance vs. Masood Textile Mills | Atlas Insurance vs. Fauji Foods | Atlas Insurance vs. KSB Pumps | Atlas Insurance vs. Mari Petroleum |
| Atlas Battery vs. Shaheen Insurance | Atlas Battery vs. Allied Bank | Atlas Battery vs. Pak Gulf Leasing | Atlas Battery vs. Atlas Insurance |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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