Correlation Between Montauk Renewables and Atco
Can any of the company-specific risk be diversified away by investing in both Montauk Renewables and Atco 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 Montauk Renewables and Atco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Montauk Renewables and Atco, you can compare the effects of market volatilities on Montauk Renewables and Atco 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 Montauk Renewables with a short position of Atco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montauk Renewables and Atco.
Diversification Opportunities for Montauk Renewables and Atco
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Montauk and Atco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Montauk Renewables and Atco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atco and Montauk Renewables 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 Montauk Renewables are associated (or correlated) with Atco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atco has no effect on the direction of Montauk Renewables i.e., Montauk Renewables and Atco go up and down completely randomly.
Pair Corralation between Montauk Renewables and Atco
Given the investment horizon of 90 days Montauk Renewables is expected to under-perform the Atco. In addition to that, Montauk Renewables is 6.27 times more volatile than Atco. It trades about -0.16 of its total potential returns per unit of risk. Atco is currently generating about 0.03 per unit of volatility. If you would invest 3,463 in Atco on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Atco or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Montauk Renewables vs. Atco
Performance |
| Timeline |
| Montauk Renewables |
| Atco |
Montauk Renewables and Atco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Montauk Renewables and Atco
The main advantage of trading using opposite Montauk Renewables and Atco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montauk Renewables position performs unexpectedly, Atco 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 Atco will offset losses from the drop in Atco's long position.| Montauk Renewables vs. Avista | Montauk Renewables vs. Allete Inc | Montauk Renewables vs. Black Hills | Montauk Renewables vs. Companhia Paranaense de |
| Atco vs. American Water Works | Atco vs. Middlesex Water | Atco vs. SJW Group Common | Atco vs. California Water Service |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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