Correlation Between ATS P and Russel Metals
Can any of the company-specific risk be diversified away by investing in both ATS P and Russel Metals 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 ATS P and Russel Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATS P and Russel Metals, you can compare the effects of market volatilities on ATS P and Russel Metals 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 ATS P with a short position of Russel Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATS P and Russel Metals.
Diversification Opportunities for ATS P and Russel Metals
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATS and Russel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ATS P and Russel Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russel Metals and ATS P 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 ATS P are associated (or correlated) with Russel Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russel Metals has no effect on the direction of ATS P i.e., ATS P and Russel Metals go up and down completely randomly.
Pair Corralation between ATS P and Russel Metals
Assuming the 90 days trading horizon ATS P is expected to under-perform the Russel Metals. In addition to that, ATS P is 1.35 times more volatile than Russel Metals. It trades about -0.02 of its total potential returns per unit of risk. Russel Metals is currently generating about 0.06 per unit of volatility. If you would invest 3,403 in Russel Metals on August 31, 2024 and sell it today you would earn a total of 1,193 from holding Russel Metals or generate 35.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATS P vs. Russel Metals
Performance |
| Timeline |
| ATS P |
| Russel Metals |
ATS P and Russel Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATS P and Russel Metals
The main advantage of trading using opposite ATS P and Russel Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATS P position performs unexpectedly, Russel Metals 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 Russel Metals will offset losses from the drop in Russel Metals' long position.| ATS P vs. Trisura Group | ATS P vs. Brookfield | ATS P vs. Storage Vault Canada | ATS P vs. Brookfield Asset Management |
| Russel Metals vs. Finning International | Russel Metals vs. Transcontinental | Russel Metals vs. Toromont Industries | Russel Metals vs. IGM Financial |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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