Correlation Between Atrium Mortgage and QC Copper

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

Diversification Opportunities for Atrium Mortgage and QC Copper

0.01

Correlation Coefficient

Atrium Mortgage  QC Copper

Significant diversification

The 3 months correlation between Atrium and QCCU is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Mortgage Investment and QC Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QC Copper 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 QC Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QC Copper has no effect on the direction of Atrium Mortgage i.e., Atrium Mortgage and QC Copper go up and down completely randomly.

Pair Corralation between Atrium Mortgage and QC Copper

Assuming the 90 days horizon Atrium Mortgage is expected to generate 1.62 times less return on investment than QC Copper. But when comparing it to its historical volatility, Atrium Mortgage Investment is 4.68 times less risky than QC Copper. It trades about 0.03 of its potential returns per unit of risk. QC Copper and is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  15.00  in QC Copper and on October 22, 2024 and sell it today you would lose (3.00) from holding QC Copper and or give up 20.0% of portfolio value over 90 days.

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

Atrium Mortgage Investment  vs.  QC Copper and

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.

QC Copper

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Atrium Mortgage and QC Copper

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

The idea behind Atrium Mortgage Investment and QC Copper and 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.