Correlation Between Atrium Mortgage and Information Services

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

Diversification Opportunities for Atrium Mortgage and Information Services

-0.16

Correlation Coefficient

Atrium Mortgage  Information Services

Good diversification

The 3 months correlation between Atrium and Information is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Mortgage Investment and Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Atrium Mortgage i.e., Atrium Mortgage and Information Services go up and down completely randomly.

Pair Corralation between Atrium Mortgage and Information Services

Assuming the 90 days horizon Atrium Mortgage is expected to generate 1.77 times less return on investment than Information Services. But when comparing it to its historical volatility, Atrium Mortgage Investment is 1.71 times less risky than Information Services. It trades about 0.04 of its potential returns per unit of risk. Information Services is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,057  in Information Services on October 3, 2024 and sell it today you would earn a total of  562.00  from holding Information Services or generate 27.32% 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.  Information Services

Atrium Mortgage Inve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atrium Mortgage Investment has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Information Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Information Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's fundamental 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 Atrium Mortgage and Information Services

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

The idea behind Atrium Mortgage Investment and Information Services 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.