Correlation Between Atlanticus Holdings and Via Renewables

Can any of the company-specific risk be diversified away by investing in both Atlanticus Holdings and Via Renewables 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 Atlanticus Holdings and Via Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Atlanticus Holdings and Via Renewables

0.66

Correlation Coefficient

Atlanticus Holdings  Via Renewables

Poor diversification

The 3 months correlation between Atlanticus and Via is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables and Atlanticus Holdings 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 Atlanticus Holdings are associated (or correlated) with Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Atlanticus Holdings i.e., Atlanticus Holdings and Via Renewables go up and down completely randomly.

Pair Corralation between Atlanticus Holdings and Via Renewables

Assuming the 90 days horizon Atlanticus Holdings is expected to under-perform the Via Renewables. But the stock apears to be less risky and, when comparing its historical volatility, Atlanticus Holdings is 1.19 times less risky than Via Renewables. The stock trades about -0.04 of its potential returns per unit of risk. The Via Renewables is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,239  in Via Renewables on September 21, 2024 and sell it today you would earn a total of  96.00  from holding Via Renewables or generate 4.29% return on investment over 90 days.

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

Atlanticus Holdings  vs.  Via Renewables

Atlanticus Holdings

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Atlanticus Holdings is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Via Renewables

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Via Renewables may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Atlanticus Holdings and Via Renewables

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

The idea behind Atlanticus Holdings and Via Renewables 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.