Correlation Between Atlas Engineered and Caldwell Partners

Can any of the company-specific risk be diversified away by investing in both Atlas Engineered and Caldwell Partners 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 Atlas Engineered and Caldwell Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlas Engineered Products and Caldwell Partners International, you can compare the effects of market volatilities on Atlas Engineered and Caldwell Partners 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 Atlas Engineered with a short position of Caldwell Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Engineered and Caldwell Partners.

Diversification Opportunities for Atlas Engineered and Caldwell Partners

0.72

Correlation Coefficient

Atlas Engineered  Caldwell Partners

Poor diversification

The 3 months correlation between Atlas and Caldwell is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Engineered Products and Caldwell Partners Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldwell Partners and Atlas Engineered 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 Atlas Engineered Products are associated (or correlated) with Caldwell Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldwell Partners has no effect on the direction of Atlas Engineered i.e., Atlas Engineered and Caldwell Partners go up and down completely randomly.

Pair Corralation between Atlas Engineered and Caldwell Partners

Assuming the 90 days horizon Atlas Engineered Products is expected to under-perform the Caldwell Partners. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Engineered Products is 1.54 times less risky than Caldwell Partners. The stock trades about -0.12 of its potential returns per unit of risk. The Caldwell Partners International is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Caldwell Partners International on December 1, 2024 and sell it today you would lose (14.00) from holding Caldwell Partners International or give up 13.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Atlas Engineered Products  vs.  Caldwell Partners Internationa

Atlas Engineered Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlas Engineered Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Caldwell Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caldwell Partners International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Atlas Engineered and Caldwell Partners

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

The idea behind Atlas Engineered Products and Caldwell Partners International 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.