Correlation Between Atlanticus Holdings and Babcock Wilcox
Can any of the company-specific risk be diversified away by investing in both Atlanticus Holdings and Babcock Wilcox 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 Atlanticus Holdings and Babcock Wilcox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlanticus Holdings and Babcock Wilcox Enterprises,, you can compare the effects of market volatilities on Atlanticus Holdings and Babcock Wilcox 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 Atlanticus Holdings with a short position of Babcock Wilcox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanticus Holdings and Babcock Wilcox.
Diversification Opportunities for Atlanticus Holdings and Babcock Wilcox
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Atlanticus and Babcock is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings and Babcock Wilcox Enterprises, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock Wilcox Enter and Atlanticus Holdings 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 Atlanticus Holdings are associated (or correlated) with Babcock Wilcox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock Wilcox Enter has no effect on the direction of Atlanticus Holdings i.e., Atlanticus Holdings and Babcock Wilcox go up and down completely randomly.
Pair Corralation between Atlanticus Holdings and Babcock Wilcox
Assuming the 90 days horizon Atlanticus Holdings is expected to generate 0.67 times more return on investment than Babcock Wilcox. However, Atlanticus Holdings is 1.48 times less risky than Babcock Wilcox. It trades about 0.16 of its potential returns per unit of risk. Babcock Wilcox Enterprises, is currently generating about 0.05 per unit of risk. If you would invest 2,355 in Atlanticus Holdings on September 1, 2024 and sell it today you would earn a total of 52.00 from holding Atlanticus Holdings or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlanticus Holdings vs. Babcock Wilcox Enterprises,
Performance |
| Timeline |
| Atlanticus Holdings |
| Babcock Wilcox Enter |
Atlanticus Holdings and Babcock Wilcox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlanticus Holdings and Babcock Wilcox
The main advantage of trading using opposite Atlanticus Holdings and Babcock Wilcox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanticus Holdings position performs unexpectedly, Babcock Wilcox 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 Babcock Wilcox will offset losses from the drop in Babcock Wilcox's long position.| Atlanticus Holdings vs. B Riley Financial | Atlanticus Holdings vs. Atlanticus Holdings Corp | Atlanticus Holdings vs. Atlas Corp | Atlanticus Holdings vs. Harrow Health 8625 |
| Babcock Wilcox vs. Harrow Health 8625 | Babcock Wilcox vs. Babcock Wilcox Enterprises | Babcock Wilcox vs. B Riley Financial | Babcock Wilcox vs. Eagle Point Credit |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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