Correlation Between Rumble and Atmus Filtration
Can any of the company-specific risk be diversified away by investing in both Rumble and Atmus Filtration 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 Rumble and Atmus Filtration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rumble Inc and Atmus Filtration Technologies, you can compare the effects of market volatilities on Rumble and Atmus Filtration 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 Rumble with a short position of Atmus Filtration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rumble and Atmus Filtration.
Diversification Opportunities for Rumble and Atmus Filtration
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rumble and Atmus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rumble Inc and Atmus Filtration Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmus Filtration Tec and Rumble 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 Rumble Inc are associated (or correlated) with Atmus Filtration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atmus Filtration Tec has no effect on the direction of Rumble i.e., Rumble and Atmus Filtration go up and down completely randomly.
Pair Corralation between Rumble and Atmus Filtration
Considering the 90-day investment horizon Rumble is expected to generate 1.48 times less return on investment than Atmus Filtration. In addition to that, Rumble is 2.27 times more volatile than Atmus Filtration Technologies. It trades about 0.05 of its total potential returns per unit of risk. Atmus Filtration Technologies is currently generating about 0.16 per unit of volatility. If you would invest 2,957 in Atmus Filtration Technologies on August 31, 2024 and sell it today you would earn a total of 1,372 from holding Atmus Filtration Technologies or generate 46.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rumble Inc vs. Atmus Filtration Technologies
Performance |
| Timeline |
| Rumble Inc |
| Atmus Filtration Tec |
Rumble and Atmus Filtration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rumble and Atmus Filtration
The main advantage of trading using opposite Rumble and Atmus Filtration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rumble position performs unexpectedly, Atmus Filtration 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 Atmus Filtration will offset losses from the drop in Atmus Filtration's long position.The idea behind Rumble Inc and Atmus Filtration Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Atmus Filtration vs. Inflection Point Acquisition | Atmus Filtration vs. Tandem Diabetes Care | Atmus Filtration vs. Weibo Corp | Atmus Filtration vs. Chester Mining |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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