Correlation Between Atlas Resources and Shanrong Biotechnology

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

By analyzing existing cross correlation between Atlas Resources International and Shanrong Biotechnology Corp, you can compare the effects of market volatilities on Atlas Resources and Shanrong Biotechnology 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 Resources with a short position of Shanrong Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Resources and Shanrong Biotechnology.

Diversification Opportunities for Atlas Resources and Shanrong Biotechnology

0.0

Correlation Coefficient

Atlas Resources  Shanrong Biotechnology

Pay attention - limited upside

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

Pair Corralation between Atlas Resources and Shanrong Biotechnology

Given the investment horizon of 90 days Atlas Resources International is expected to generate 3.22 times more return on investment than Shanrong Biotechnology. However, Atlas Resources is 3.22 times more volatile than Shanrong Biotechnology Corp. It trades about 0.04 of its potential returns per unit of risk. Shanrong Biotechnology Corp is currently generating about 0.03 per unit of risk. If you would invest  5.10  in Atlas Resources International on October 10, 2024 and sell it today you would lose (5.00) from holding Atlas Resources International or give up 98.04% of portfolio value over 90 days.

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

Atlas Resources International  vs.  Shanrong Biotechnology Corp

Atlas Resources Inte

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Atlas Resources International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Atlas Resources is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Shanrong Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shanrong Biotechnology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Atlas Resources and Shanrong Biotechnology

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

The idea behind Atlas Resources International and Shanrong Biotechnology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.