Correlation Between Atlas Engineered and Kodiak Copper

Can any of the company-specific risk be diversified away by investing in both Atlas Engineered and Kodiak Copper 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 Kodiak Copper 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 Kodiak Copper Corp, you can compare the effects of market volatilities on Atlas Engineered and Kodiak Copper 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 Kodiak Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Engineered and Kodiak Copper.

Diversification Opportunities for Atlas Engineered and Kodiak Copper

0.3

Correlation Coefficient

Atlas Engineered  Kodiak Copper

Weak diversification

The 3 months correlation between Atlas and Kodiak is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Engineered Products and Kodiak Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Copper Corp 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 Kodiak Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Copper Corp has no effect on the direction of Atlas Engineered i.e., Atlas Engineered and Kodiak Copper go up and down completely randomly.

Pair Corralation between Atlas Engineered and Kodiak Copper

Assuming the 90 days horizon Atlas Engineered Products is expected to under-perform the Kodiak Copper. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Engineered Products is 1.3 times less risky than Kodiak Copper. The stock trades about -0.02 of its potential returns per unit of risk. The Kodiak Copper Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  43.00  in Kodiak Copper Corp on September 4, 2024 and sell it today you would lose (2.00) from holding Kodiak Copper Corp or give up 4.65% of portfolio value over 90 days.

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

Atlas Engineered Products  vs.  Kodiak Copper Corp

Atlas Engineered Products

Risk-Adjusted Performance

0 of 100

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 fairly stable basic indicators, Atlas Engineered is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Kodiak Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kodiak Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Kodiak Copper is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Atlas Engineered and Kodiak Copper

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

The idea behind Atlas Engineered Products and Kodiak Copper Corp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.