Correlation Between Atlas Consolidated and Suntrust Home

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

Diversification Opportunities for Atlas Consolidated and Suntrust Home

-0.17

Correlation Coefficient

Atlas Consolidated  Suntrust Home

Good diversification

The 3 months correlation between Atlas and Suntrust is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Consolidated Mining and Suntrust Home Developers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntrust Home Developers 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 Suntrust Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntrust Home Developers has no effect on the direction of Atlas Consolidated i.e., Atlas Consolidated and Suntrust Home go up and down completely randomly.

Pair Corralation between Atlas Consolidated and Suntrust Home

Assuming the 90 days trading horizon Atlas Consolidated is expected to generate 7.12 times less return on investment than Suntrust Home. But when comparing it to its historical volatility, Atlas Consolidated Mining is 1.61 times less risky than Suntrust Home. It trades about 0.0 of its potential returns per unit of risk. Suntrust Home Developers is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Suntrust Home Developers on October 11, 2024 and sell it today you would lose (18.00) from holding Suntrust Home Developers or give up 18.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.53%
Values	Daily Returns

Atlas Consolidated Mining  vs.  Suntrust Home Developers

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 latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Suntrust Home Developers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Suntrust Home Developers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Atlas Consolidated and Suntrust Home

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

The idea behind Atlas Consolidated Mining and Suntrust Home Developers 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.