Correlation Between Atlas Technology and Mundus

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

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

Diversification Opportunities for Atlas Technology and Mundus

0.0

Correlation Coefficient

Atlas Technology  Mundus

Pay attention - limited upside

The 3 months correlation between Atlas and Mundus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Technology Grp and Mundus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mundus Group and Atlas Technology 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 Technology Grp are associated (or correlated) with Mundus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mundus Group has no effect on the direction of Atlas Technology i.e., Atlas Technology and Mundus go up and down completely randomly.

Pair Corralation between Atlas Technology and Mundus

Given the investment horizon of 90 days Atlas Technology Grp is expected to generate 3.3 times more return on investment than Mundus. However, Atlas Technology is 3.3 times more volatile than Mundus Group. It trades about 0.16 of its potential returns per unit of risk. Mundus Group is currently generating about 0.03 per unit of risk. If you would invest  0.01  in Atlas Technology Grp on December 19, 2024 and sell it today you would earn a total of  0.01  from holding Atlas Technology Grp or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Atlas Technology Grp  vs.  Mundus Group

Atlas Technology Grp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Technology Grp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Atlas Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Mundus Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mundus Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, Mundus reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atlas Technology and Mundus

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

The idea behind Atlas Technology Grp and Mundus Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.