Correlation Between Atlanticus Holdings and Atlas Corp

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

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

Diversification Opportunities for Atlanticus Holdings and Atlas Corp

0.56

Correlation Coefficient

Atlanticus Holdings  Atlas Corp

Very weak diversification

The 3 months correlation between Atlanticus and Atlas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings Corp and Atlas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Corp 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 Corp are associated (or correlated) with Atlas Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Corp has no effect on the direction of Atlanticus Holdings i.e., Atlanticus Holdings and Atlas Corp go up and down completely randomly.

Pair Corralation between Atlanticus Holdings and Atlas Corp

Assuming the 90 days horizon Atlanticus Holdings Corp is expected to generate 2.61 times more return on investment than Atlas Corp. However, Atlanticus Holdings is 2.61 times more volatile than Atlas Corp. It trades about 0.04 of its potential returns per unit of risk. Atlas Corp is currently generating about 0.06 per unit of risk. If you would invest  1,784  in Atlanticus Holdings Corp on October 7, 2024 and sell it today you would earn a total of  531.00  from holding Atlanticus Holdings Corp or generate 29.76% return on investment over 90 days.

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

Atlanticus Holdings Corp  vs.  Atlas Corp

Atlanticus Holdings Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Atlanticus Holdings is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Atlas Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Atlas Corp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Atlanticus Holdings and Atlas Corp

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

The idea behind Atlanticus Holdings Corp and Atlas 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 CEOs Directory module to screen CEOs from public companies around the world.