Correlation Between Atlas Consolidated and Axelum Resources

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

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

Diversification Opportunities for Atlas Consolidated and Axelum Resources

0.61

Correlation Coefficient

Atlas Consolidated  Axelum Resources

Poor diversification

The 3 months correlation between Atlas and Axelum is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Consolidated Mining and Axelum Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axelum Resources Corp and Atlas Consolidated 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 Consolidated Mining are associated (or correlated) with Axelum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axelum Resources Corp has no effect on the direction of Atlas Consolidated i.e., Atlas Consolidated and Axelum Resources go up and down completely randomly.

Pair Corralation between Atlas Consolidated and Axelum Resources

Assuming the 90 days trading horizon Atlas Consolidated Mining is expected to generate 0.64 times more return on investment than Axelum Resources. However, Atlas Consolidated Mining is 1.57 times less risky than Axelum Resources. It trades about 0.04 of its potential returns per unit of risk. Axelum Resources Corp is currently generating about 0.01 per unit of risk. If you would invest  334.00  in Atlas Consolidated Mining on October 5, 2024 and sell it today you would earn a total of  71.00  from holding Atlas Consolidated Mining or generate 21.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.64%
Values	Daily Returns

Atlas Consolidated Mining  vs.  Axelum Resources Corp

Atlas Consolidated Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlas Consolidated Mining 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 basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Axelum Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axelum Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Axelum Resources is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Atlas Consolidated and Axelum Resources

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

The idea behind Atlas Consolidated Mining and Axelum Resources 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.