Correlation Between Atlas Insurance and Grays Leasing

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

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

Diversification Opportunities for Atlas Insurance and Grays Leasing

0.63

Correlation Coefficient

Atlas Insurance  Grays Leasing

Poor diversification

The 3 months correlation between Atlas and Grays is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and Grays Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grays Leasing and Atlas Insurance 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 Insurance are associated (or correlated) with Grays Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grays Leasing has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and Grays Leasing go up and down completely randomly.

Pair Corralation between Atlas Insurance and Grays Leasing

Assuming the 90 days trading horizon Atlas Insurance is expected to generate 0.44 times more return on investment than Grays Leasing. However, Atlas Insurance is 2.3 times less risky than Grays Leasing. It trades about 0.24 of its potential returns per unit of risk. Grays Leasing is currently generating about 0.05 per unit of risk. If you would invest  4,532  in Atlas Insurance on October 25, 2024 and sell it today you would earn a total of  1,505  from holding Atlas Insurance or generate 33.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.16%
Values	Daily Returns

Atlas Insurance  vs.  Grays Leasing

Atlas Insurance

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Insurance are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Atlas Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Grays Leasing

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grays Leasing are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grays Leasing sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atlas Insurance and Grays Leasing

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

The idea behind Atlas Insurance and Grays Leasing 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.