Correlation Between PF Atlantic and Fundamental Invest

Can any of the company-specific risk be diversified away by investing in both PF Atlantic and Fundamental Invest 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 PF Atlantic and Fundamental Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PF Atlantic Petroleum and Fundamental Invest Stock, you can compare the effects of market volatilities on PF Atlantic and Fundamental Invest 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 PF Atlantic with a short position of Fundamental Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of PF Atlantic and Fundamental Invest.

Diversification Opportunities for PF Atlantic and Fundamental Invest

-0.1

Correlation Coefficient

PF Atlantic  Fundamental Invest

Good diversification

The 3 months correlation between ATLA-DKK and Fundamental is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding PF Atlantic Petroleum and Fundamental Invest Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Invest Stock and PF Atlantic 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 PF Atlantic Petroleum are associated (or correlated) with Fundamental Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Invest Stock has no effect on the direction of PF Atlantic i.e., PF Atlantic and Fundamental Invest go up and down completely randomly.

Pair Corralation between PF Atlantic and Fundamental Invest

Assuming the 90 days trading horizon PF Atlantic Petroleum is expected to generate 4.1 times more return on investment than Fundamental Invest. However, PF Atlantic is 4.1 times more volatile than Fundamental Invest Stock. It trades about 0.08 of its potential returns per unit of risk. Fundamental Invest Stock is currently generating about -0.12 per unit of risk. If you would invest  157.00  in PF Atlantic Petroleum on December 28, 2024 and sell it today you would earn a total of  38.00  from holding PF Atlantic Petroleum or generate 24.2% return on investment over 90 days.

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

PF Atlantic Petroleum  vs.  Fundamental Invest Stock

PF Atlantic Petroleum

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PF Atlantic Petroleum are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, PF Atlantic disclosed solid returns over the last few months and may actually be approaching a breakup point.

Fundamental Invest Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fundamental Invest Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with PF Atlantic and Fundamental Invest

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

The idea behind PF Atlantic Petroleum and Fundamental Invest Stock 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.