Correlation Between Atlas For and Al Arafa

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

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

Diversification Opportunities for Atlas For and Al Arafa

0.0

Correlation Coefficient

Atlas For  Al Arafa

Pay attention - limited upside

The 3 months correlation between Atlas and AIVCB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atlas For Investment and Al Arafa Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Arafa Investment and Atlas For 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 For Investment are associated (or correlated) with Al Arafa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Arafa Investment has no effect on the direction of Atlas For i.e., Atlas For and Al Arafa go up and down completely randomly.

Pair Corralation between Atlas For and Al Arafa

If you would invest  110.00  in Atlas For Investment on December 5, 2024 and sell it today you would earn a total of  22.00  from holding Atlas For Investment or generate 20.0% return on investment over 90 days.

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

Atlas For Investment  vs.  Al Arafa Investment

Atlas For Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas For Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Atlas For reported solid returns over the last few months and may actually be approaching a breakup point.

Al Arafa Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Al Arafa Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Al Arafa is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Atlas For and Al Arafa

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

The idea behind Atlas For Investment and Al Arafa Investment 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.