Correlation Between Latham and Atlas Engineered
Can any of the company-specific risk be diversified away by investing in both Latham and Atlas Engineered 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 Latham and Atlas Engineered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Latham Group and Atlas Engineered Products, you can compare the effects of market volatilities on Latham and Atlas Engineered 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 Latham with a short position of Atlas Engineered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Latham and Atlas Engineered.
Diversification Opportunities for Latham and Atlas Engineered
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Latham and Atlas is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Latham Group and Atlas Engineered Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Engineered Products and Latham 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 Latham Group are associated (or correlated) with Atlas Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Engineered Products has no effect on the direction of Latham i.e., Latham and Atlas Engineered go up and down completely randomly.
Pair Corralation between Latham and Atlas Engineered
Given the investment horizon of 90 days Latham Group is expected to generate 1.66 times more return on investment than Atlas Engineered. However, Latham is 1.66 times more volatile than Atlas Engineered Products. It trades about 0.04 of its potential returns per unit of risk. Atlas Engineered Products is currently generating about 0.03 per unit of risk. If you would invest 440.00 in Latham Group on October 25, 2024 and sell it today you would earn a total of 265.00 from holding Latham Group or generate 60.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Latham Group vs. Atlas Engineered Products
Performance |
| Timeline |
| Latham Group |
| Atlas Engineered Products |
Latham and Atlas Engineered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Latham and Atlas Engineered
The main advantage of trading using opposite Latham and Atlas Engineered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Latham position performs unexpectedly, Atlas Engineered 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 Engineered will offset losses from the drop in Atlas Engineered's long position.| Latham vs. Janus International Group | Latham vs. Quanex Building Products | Latham vs. GMS Inc | Latham vs. Gibraltar Industries |
| Atlas Engineered vs. Travis Perkins PLC | Atlas Engineered vs. Antelope Enterprise Holdings | Atlas Engineered vs. Intelligent Living Application | Atlas Engineered vs. Beacon Roofing Supply |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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