Correlation Between Hammond Power and Atlas Engineered
Can any of the company-specific risk be diversified away by investing in both Hammond Power 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 Hammond Power and Atlas Engineered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammond Power Solutions and Atlas Engineered Products, you can compare the effects of market volatilities on Hammond Power 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 Hammond Power with a short position of Atlas Engineered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammond Power and Atlas Engineered.
Diversification Opportunities for Hammond Power and Atlas Engineered
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hammond and Atlas is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hammond Power Solutions 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 Hammond Power 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 Hammond Power Solutions 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 Hammond Power i.e., Hammond Power and Atlas Engineered go up and down completely randomly.
Pair Corralation between Hammond Power and Atlas Engineered
Assuming the 90 days trading horizon Hammond Power Solutions is expected to generate 1.36 times more return on investment than Atlas Engineered. However, Hammond Power is 1.36 times more volatile than Atlas Engineered Products. It trades about -0.02 of its potential returns per unit of risk. Atlas Engineered Products is currently generating about -0.03 per unit of risk. If you would invest 15,533 in Hammond Power Solutions on October 12, 2024 and sell it today you would lose (3,811) from holding Hammond Power Solutions or give up 24.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hammond Power Solutions vs. Atlas Engineered Products
Performance |
| Timeline |
| Hammond Power Solutions |
| Atlas Engineered Products |
Hammond Power and Atlas Engineered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammond Power and Atlas Engineered
The main advantage of trading using opposite Hammond Power and Atlas Engineered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammond Power 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.| Hammond Power vs. Hammond Manufacturing | Hammond Power vs. Firan Technology Group | Hammond Power vs. Supremex | Hammond Power vs. Geodrill Limited |
| Atlas Engineered vs. Redishred Capital Corp | Atlas Engineered vs. Fab Form Industries | Atlas Engineered vs. Inventronics | Atlas Engineered vs. Caldwell Partners International |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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