Correlation Between Metro Retail and Atlas Consolidated
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Atlas Consolidated 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 Metro Retail and Atlas Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Retail Stores and Atlas Consolidated Mining, you can compare the effects of market volatilities on Metro Retail and Atlas Consolidated 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 Metro Retail with a short position of Atlas Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Atlas Consolidated.
Diversification Opportunities for Metro Retail and Atlas Consolidated
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Metro and Atlas is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Atlas Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Consolidated Mining and Metro Retail 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 Metro Retail Stores are associated (or correlated) with Atlas Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Consolidated Mining has no effect on the direction of Metro Retail i.e., Metro Retail and Atlas Consolidated go up and down completely randomly.
Pair Corralation between Metro Retail and Atlas Consolidated
Assuming the 90 days trading horizon Metro Retail Stores is expected to generate 0.82 times more return on investment than Atlas Consolidated. However, Metro Retail Stores is 1.22 times less risky than Atlas Consolidated. It trades about 0.01 of its potential returns per unit of risk. Atlas Consolidated Mining is currently generating about -0.02 per unit of risk. If you would invest 120.00 in Metro Retail Stores on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Metro Retail Stores or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Retail Stores vs. Atlas Consolidated Mining
Performance |
| Timeline |
| Metro Retail Stores |
| Atlas Consolidated Mining |
Metro Retail and Atlas Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Atlas Consolidated
The main advantage of trading using opposite Metro Retail and Atlas Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Atlas Consolidated 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 Consolidated will offset losses from the drop in Atlas Consolidated's long position.| Metro Retail vs. Rizal Commercial Banking | Metro Retail vs. Security Bank Corp | Metro Retail vs. Converge Information Communications | Metro Retail vs. Crown Asia Chemicals |
| Atlas Consolidated vs. Security Bank Corp | Atlas Consolidated vs. Prime Media Holdings | Atlas Consolidated vs. STI Education Systems | Atlas Consolidated vs. Metro Retail Stores |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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