Correlation Between Atlas Insurance and United Bank
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and United Bank 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 United Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and United Bank, you can compare the effects of market volatilities on Atlas Insurance and United Bank 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 United Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and United Bank.
Diversification Opportunities for Atlas Insurance and United Bank
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Atlas and United is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and United Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bank 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 United Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bank has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and United Bank go up and down completely randomly.
Pair Corralation between Atlas Insurance and United Bank
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 1.07 times more return on investment than United Bank. However, Atlas Insurance is 1.07 times more volatile than United Bank. It trades about 0.4 of its potential returns per unit of risk. United Bank is currently generating about 0.32 per unit of risk. If you would invest 5,009 in Atlas Insurance on September 12, 2024 and sell it today you would earn a total of 1,032 from holding Atlas Insurance or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Atlas Insurance vs. United Bank
Performance |
| Timeline |
| Atlas Insurance |
| United Bank |
Atlas Insurance and United Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and United Bank
The main advantage of trading using opposite Atlas Insurance and United Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, United Bank 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 United Bank will offset losses from the drop in United Bank's long position.| Atlas Insurance vs. Masood Textile Mills | Atlas Insurance vs. Fauji Foods | Atlas Insurance vs. KSB Pumps | Atlas Insurance vs. Mari Petroleum |
| United Bank vs. Oil and Gas | United Bank vs. Pakistan State Oil | United Bank vs. Pakistan Petroleum | United Bank vs. Fauji Fertilizer |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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