Correlation Between Atlas Insurance and Hi Tech
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and Hi Tech 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 Hi Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and Hi Tech Lubricants, you can compare the effects of market volatilities on Atlas Insurance and Hi Tech 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 Hi Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and Hi Tech.
Diversification Opportunities for Atlas Insurance and Hi Tech
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atlas and HTL is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and Hi Tech Lubricants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech Lubricants 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 Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech Lubricants has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and Hi Tech go up and down completely randomly.
Pair Corralation between Atlas Insurance and Hi Tech
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 2.56 times less return on investment than Hi Tech. But when comparing it to its historical volatility, Atlas Insurance is 2.74 times less risky than Hi Tech. It trades about 0.04 of its potential returns per unit of risk. Hi Tech Lubricants is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,841 in Hi Tech Lubricants on October 21, 2024 and sell it today you would earn a total of 78.00 from holding Hi Tech Lubricants or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Insurance vs. Hi Tech Lubricants
Performance |
| Timeline |
| Atlas Insurance |
| Hi Tech Lubricants |
Atlas Insurance and Hi Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and Hi Tech
The main advantage of trading using opposite Atlas Insurance and Hi Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, Hi Tech 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 Hi Tech will offset losses from the drop in Hi Tech's long position.| Atlas Insurance vs. Matco Foods | Atlas Insurance vs. Fauji Foods | Atlas Insurance vs. Oil and Gas | Atlas Insurance vs. Hi Tech Lubricants |
| Hi Tech vs. Atlas Insurance | Hi Tech vs. Soneri Bank | Hi Tech vs. Askari Bank | Hi Tech vs. JS Global Banking |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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