Correlation Between Atlantic American and 78409VBK9

Can any of the company-specific risk be diversified away by investing in both Atlantic American and 78409VBK9 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 Atlantic American and 78409VBK9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlantic American and SPGI 29 01 MAR 32, you can compare the effects of market volatilities on Atlantic American and 78409VBK9 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 Atlantic American with a short position of 78409VBK9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic American and 78409VBK9.

Diversification Opportunities for Atlantic American and 78409VBK9

0.43

Correlation Coefficient

Atlantic American  78409VBK9

Very weak diversification

The 3 months correlation between Atlantic and 78409VBK9 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic American and SPGI 29 01 MAR 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPGI 29 01 and Atlantic American 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 Atlantic American are associated (or correlated) with 78409VBK9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPGI 29 01 has no effect on the direction of Atlantic American i.e., Atlantic American and 78409VBK9 go up and down completely randomly.

Pair Corralation between Atlantic American and 78409VBK9

Given the investment horizon of 90 days Atlantic American is expected to generate 6.03 times more return on investment than 78409VBK9. However, Atlantic American is 6.03 times more volatile than SPGI 29 01 MAR 32. It trades about 0.0 of its potential returns per unit of risk. SPGI 29 01 MAR 32 is currently generating about -0.07 per unit of risk. If you would invest  150.00  in Atlantic American on October 15, 2024 and sell it today you would lose (1.00) from holding Atlantic American or give up 0.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.0%
Values	Daily Returns

Atlantic American  vs.  SPGI 29 01 MAR 32

Atlantic American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlantic American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

SPGI 29 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPGI 29 01 MAR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 78409VBK9 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atlantic American and 78409VBK9

The main advantage of trading using opposite Atlantic American and 78409VBK9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic American position performs unexpectedly, 78409VBK9 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 78409VBK9 will offset losses from the drop in 78409VBK9's long position.

The idea behind Atlantic American and SPGI 29 01 MAR 32 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.