Correlation Between Atlas Consolidated and PXP Energy

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

Diversification Opportunities for Atlas Consolidated and PXP Energy

0.13

Correlation Coefficient

Atlas Consolidated  PXP Energy

Average diversification

The 3 months correlation between Atlas and PXP is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Consolidated Mining and PXP Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PXP Energy 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 PXP Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PXP Energy Corp has no effect on the direction of Atlas Consolidated i.e., Atlas Consolidated and PXP Energy go up and down completely randomly.

Pair Corralation between Atlas Consolidated and PXP Energy

Assuming the 90 days trading horizon Atlas Consolidated Mining is expected to generate 0.46 times more return on investment than PXP Energy. However, Atlas Consolidated Mining is 2.18 times less risky than PXP Energy. It trades about 0.06 of its potential returns per unit of risk. PXP Energy Corp is currently generating about 0.02 per unit of risk. If you would invest  411.00  in Atlas Consolidated Mining on December 20, 2024 and sell it today you would earn a total of  31.00  from holding Atlas Consolidated Mining or generate 7.54% return on investment over 90 days.

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

Atlas Consolidated Mining  vs.  PXP Energy Corp

Atlas Consolidated Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Consolidated Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Atlas Consolidated may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PXP Energy Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PXP Energy Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, PXP Energy is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Atlas Consolidated and PXP Energy

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

The idea behind Atlas Consolidated Mining and PXP Energy 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.