Correlation Between American Tower and ADRIATIC METALS

Can any of the company-specific risk be diversified away by investing in both American Tower and ADRIATIC METALS 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 American Tower and ADRIATIC METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Tower Corp and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on American Tower and ADRIATIC METALS 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 American Tower with a short position of ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Tower and ADRIATIC METALS.

Diversification Opportunities for American Tower and ADRIATIC METALS

0.6

Correlation Coefficient

American Tower  ADRIATIC METALS

Poor diversification

The 3 months correlation between American and ADRIATIC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding American Tower Corp and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS and American Tower 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 American Tower Corp are associated (or correlated) with ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of American Tower i.e., American Tower and ADRIATIC METALS go up and down completely randomly.

Pair Corralation between American Tower and ADRIATIC METALS

Assuming the 90 days horizon American Tower is expected to generate 4.59 times less return on investment than ADRIATIC METALS. But when comparing it to its historical volatility, American Tower Corp is 2.39 times less risky than ADRIATIC METALS. It trades about 0.06 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  230.00  in ADRIATIC METALS LS 013355 on October 26, 2024 and sell it today you would earn a total of  14.00  from holding ADRIATIC METALS LS 013355 or generate 6.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

American Tower Corp  vs.  ADRIATIC METALS LS 013355

American Tower Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Tower Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ADRIATIC METALS LS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADRIATIC METALS LS 013355 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ADRIATIC METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with American Tower and ADRIATIC METALS

The main advantage of trading using opposite American Tower and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Tower position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.

The idea behind American Tower Corp and ADRIATIC METALS LS 013355 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.