Correlation Between Atlas Consolidated and BRNPB

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

Diversification Opportunities for Atlas Consolidated and BRNPB

0.16

Correlation Coefficient

Atlas Consolidated  BRNPB

Average diversification

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

Pair Corralation between Atlas Consolidated and BRNPB

Assuming the 90 days trading horizon Atlas Consolidated Mining is expected to generate 0.41 times more return on investment than BRNPB. However, Atlas Consolidated Mining is 2.44 times less risky than BRNPB. It trades about 0.11 of its potential returns per unit of risk. BRNPB is currently generating about 0.01 per unit of risk. If you would invest  420.00  in Atlas Consolidated Mining on December 22, 2024 and sell it today you would earn a total of  79.00  from holding Atlas Consolidated Mining or generate 18.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	22.03%
Values	Daily Returns

Atlas Consolidated Mining  vs.  BRNPB

Atlas Consolidated Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Consolidated Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Atlas Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

BRNPB

Risk-Adjusted Performance

Very Weak

Over the last 90 days BRNPB has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, BRNPB is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Atlas Consolidated and BRNPB

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

The idea behind Atlas Consolidated Mining and BRNPB 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.