Correlation Between Atrium Mortgage and BOEING CDR

Can any of the company-specific risk be diversified away by investing in both Atrium Mortgage and BOEING CDR 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 Atrium Mortgage and BOEING CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atrium Mortgage Investment and BOEING CDR, you can compare the effects of market volatilities on Atrium Mortgage and BOEING CDR 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 Atrium Mortgage with a short position of BOEING CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atrium Mortgage and BOEING CDR.

Diversification Opportunities for Atrium Mortgage and BOEING CDR

-0.06

Correlation Coefficient

Atrium Mortgage  BOEING CDR

Good diversification

The 3 months correlation between Atrium and BOEING is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Mortgage Investment and BOEING CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOEING CDR and Atrium Mortgage 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 Atrium Mortgage Investment are associated (or correlated) with BOEING CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOEING CDR has no effect on the direction of Atrium Mortgage i.e., Atrium Mortgage and BOEING CDR go up and down completely randomly.

Pair Corralation between Atrium Mortgage and BOEING CDR

Assuming the 90 days horizon Atrium Mortgage is expected to generate 18.15 times less return on investment than BOEING CDR. But when comparing it to its historical volatility, Atrium Mortgage Investment is 2.87 times less risky than BOEING CDR. It trades about 0.02 of its potential returns per unit of risk. BOEING CDR is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,600  in BOEING CDR on October 9, 2024 and sell it today you would earn a total of  355.00  from holding BOEING CDR or generate 13.65% return on investment over 90 days.

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

Atrium Mortgage Investment  vs.  BOEING CDR

Atrium Mortgage Inve

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atrium Mortgage Investment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Atrium Mortgage is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

BOEING CDR

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BOEING CDR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BOEING CDR displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atrium Mortgage and BOEING CDR

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

The idea behind Atrium Mortgage Investment and BOEING CDR 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.