Correlation Between Albertsons Companies and Chicago Atlantic

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

By analyzing existing cross correlation between Albertsons Companies and Chicago Atlantic BDC,, you can compare the effects of market volatilities on Albertsons Companies and Chicago Atlantic 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 Albertsons Companies with a short position of Chicago Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Chicago Atlantic.

Diversification Opportunities for Albertsons Companies and Chicago Atlantic

-0.43

Correlation Coefficient

Albertsons Companies  Chicago Atlantic

Very good diversification

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

Pair Corralation between Albertsons Companies and Chicago Atlantic

Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.83 times more return on investment than Chicago Atlantic. However, Albertsons Companies is 1.2 times less risky than Chicago Atlantic. It trades about 0.09 of its potential returns per unit of risk. Chicago Atlantic BDC, is currently generating about 0.01 per unit of risk. If you would invest  1,885  in Albertsons Companies on October 7, 2024 and sell it today you would earn a total of  95.00  from holding Albertsons Companies or generate 5.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Albertsons Companies  vs.  Chicago Atlantic BDC,

Albertsons Companies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Albertsons Companies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Albertsons Companies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Chicago Atlantic BDC,

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic BDC, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Chicago Atlantic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Albertsons Companies and Chicago Atlantic

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

The idea behind Albertsons Companies and Chicago Atlantic BDC, 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.