Correlation Between International Steels and Atlas Battery
Can any of the company-specific risk be diversified away by investing in both International Steels and Atlas Battery 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 International Steels and Atlas Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Steels and Atlas Battery, you can compare the effects of market volatilities on International Steels and Atlas Battery 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 International Steels with a short position of Atlas Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Steels and Atlas Battery.
Diversification Opportunities for International Steels and Atlas Battery
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between International and Atlas is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding International Steels and Atlas Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Battery and International Steels 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 International Steels are associated (or correlated) with Atlas Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Battery has no effect on the direction of International Steels i.e., International Steels and Atlas Battery go up and down completely randomly.
Pair Corralation between International Steels and Atlas Battery
Assuming the 90 days trading horizon International Steels is expected to generate 2.21 times less return on investment than Atlas Battery. But when comparing it to its historical volatility, International Steels is 1.24 times less risky than Atlas Battery. It trades about 0.05 of its potential returns per unit of risk. Atlas Battery is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 23,110 in Atlas Battery on September 14, 2024 and sell it today you would earn a total of 16,978 from holding Atlas Battery or generate 73.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Steels vs. Atlas Battery
Performance |
| Timeline |
| International Steels |
| Atlas Battery |
International Steels and Atlas Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Steels and Atlas Battery
The main advantage of trading using opposite International Steels and Atlas Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Steels position performs unexpectedly, Atlas Battery 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 Battery will offset losses from the drop in Atlas Battery's long position.| International Steels vs. Masood Textile Mills | International Steels vs. Fauji Foods | International Steels vs. KSB Pumps | International Steels vs. Mari Petroleum |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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