Correlation Between Beacon Roofing and Atlas Engineered
Can any of the company-specific risk be diversified away by investing in both Beacon Roofing and Atlas Engineered 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 Beacon Roofing and Atlas Engineered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beacon Roofing Supply and Atlas Engineered Products, you can compare the effects of market volatilities on Beacon Roofing and Atlas Engineered 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 Beacon Roofing with a short position of Atlas Engineered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beacon Roofing and Atlas Engineered.
Diversification Opportunities for Beacon Roofing and Atlas Engineered
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Beacon and Atlas is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Beacon Roofing Supply and Atlas Engineered Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Engineered Products and Beacon Roofing 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 Beacon Roofing Supply are associated (or correlated) with Atlas Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Engineered Products has no effect on the direction of Beacon Roofing i.e., Beacon Roofing and Atlas Engineered go up and down completely randomly.
Pair Corralation between Beacon Roofing and Atlas Engineered
Given the investment horizon of 90 days Beacon Roofing Supply is expected to generate 0.66 times more return on investment than Atlas Engineered. However, Beacon Roofing Supply is 1.52 times less risky than Atlas Engineered. It trades about 0.07 of its potential returns per unit of risk. Atlas Engineered Products is currently generating about 0.01 per unit of risk. If you would invest 7,282 in Beacon Roofing Supply on August 31, 2024 and sell it today you would earn a total of 4,020 from holding Beacon Roofing Supply or generate 55.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Beacon Roofing Supply vs. Atlas Engineered Products
Performance |
| Timeline |
| Beacon Roofing Supply |
| Atlas Engineered Products |
Beacon Roofing and Atlas Engineered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beacon Roofing and Atlas Engineered
The main advantage of trading using opposite Beacon Roofing and Atlas Engineered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beacon Roofing position performs unexpectedly, Atlas Engineered 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 Engineered will offset losses from the drop in Atlas Engineered's long position.| Beacon Roofing vs. Quanex Building Products | Beacon Roofing vs. Gibraltar Industries | Beacon Roofing vs. Armstrong World Industries | Beacon Roofing vs. Janus International Group |
| Atlas Engineered vs. Travis Perkins PLC | Atlas Engineered vs. Antelope Enterprise Holdings | Atlas Engineered vs. Intelligent Living Application | Atlas Engineered vs. Beacon Roofing Supply |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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