Correlation Between KSB Pumps and Atlas Insurance
Can any of the company-specific risk be diversified away by investing in both KSB Pumps and Atlas Insurance 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 KSB Pumps and Atlas Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KSB Pumps and Atlas Insurance, you can compare the effects of market volatilities on KSB Pumps and Atlas Insurance 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 KSB Pumps with a short position of Atlas Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSB Pumps and Atlas Insurance.
Diversification Opportunities for KSB Pumps and Atlas Insurance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KSB and Atlas is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding KSB Pumps and Atlas Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Insurance and KSB Pumps 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 KSB Pumps are associated (or correlated) with Atlas Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Insurance has no effect on the direction of KSB Pumps i.e., KSB Pumps and Atlas Insurance go up and down completely randomly.
Pair Corralation between KSB Pumps and Atlas Insurance
Assuming the 90 days trading horizon KSB Pumps is expected to under-perform the Atlas Insurance. In addition to that, KSB Pumps is 1.34 times more volatile than Atlas Insurance. It trades about -0.18 of its total potential returns per unit of risk. Atlas Insurance is currently generating about 0.05 per unit of volatility. If you would invest 5,673 in Atlas Insurance on November 8, 2024 and sell it today you would earn a total of 88.00 from holding Atlas Insurance or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KSB Pumps vs. Atlas Insurance
Performance |
| Timeline |
| KSB Pumps |
| Atlas Insurance |
KSB Pumps and Atlas Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSB Pumps and Atlas Insurance
The main advantage of trading using opposite KSB Pumps and Atlas Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSB Pumps position performs unexpectedly, Atlas Insurance 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 Insurance will offset losses from the drop in Atlas Insurance's long position.| KSB Pumps vs. Supernet Technologie | KSB Pumps vs. Hi Tech Lubricants | KSB Pumps vs. Big Bird Foods | KSB Pumps vs. Quice Food Industries |
| Atlas Insurance vs. Allied Bank | Atlas Insurance vs. Engro Polymer Chemicals | Atlas Insurance vs. Universal Insurance | Atlas Insurance vs. Century Insurance |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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