Correlation Between Credit Acceptance and Atlanticus Holdings
Can any of the company-specific risk be diversified away by investing in both Credit Acceptance and Atlanticus Holdings 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 Credit Acceptance and Atlanticus Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Acceptance and Atlanticus Holdings Corp, you can compare the effects of market volatilities on Credit Acceptance and Atlanticus Holdings 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 Credit Acceptance with a short position of Atlanticus Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Acceptance and Atlanticus Holdings.
Diversification Opportunities for Credit Acceptance and Atlanticus Holdings
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Credit and Atlanticus is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Credit Acceptance and Atlanticus Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings Corp and Credit Acceptance 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 Credit Acceptance are associated (or correlated) with Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings Corp has no effect on the direction of Credit Acceptance i.e., Credit Acceptance and Atlanticus Holdings go up and down completely randomly.
Pair Corralation between Credit Acceptance and Atlanticus Holdings
Given the investment horizon of 90 days Credit Acceptance is expected to generate 3.58 times more return on investment than Atlanticus Holdings. However, Credit Acceptance is 3.58 times more volatile than Atlanticus Holdings Corp. It trades about 0.16 of its potential returns per unit of risk. Atlanticus Holdings Corp is currently generating about 0.34 per unit of risk. If you would invest 45,244 in Credit Acceptance on August 30, 2024 and sell it today you would earn a total of 4,180 from holding Credit Acceptance or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Acceptance vs. Atlanticus Holdings Corp
Performance |
| Timeline |
| Credit Acceptance |
| Atlanticus Holdings Corp |
Credit Acceptance and Atlanticus Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Acceptance and Atlanticus Holdings
The main advantage of trading using opposite Credit Acceptance and Atlanticus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Acceptance position performs unexpectedly, Atlanticus Holdings 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 Atlanticus Holdings will offset losses from the drop in Atlanticus Holdings' long position.| Credit Acceptance vs. World Acceptance | Credit Acceptance vs. FirstCash | Credit Acceptance vs. Dorman Products | Credit Acceptance vs. Encore Capital Group |
| Atlanticus Holdings vs. Capital One Financial | Atlanticus Holdings vs. Capital One Financial | Atlanticus Holdings vs. Citizens Financial Group | Atlanticus Holdings vs. Wells Fargo |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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