Correlation Between BRNPB and Atlas Consolidated

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

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

Diversification Opportunities for BRNPB and Atlas Consolidated

-0.57

Correlation Coefficient

BRNPB  Atlas Consolidated

Excellent diversification

The 3 months correlation between BRNPB and Atlas is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BRNPB and Atlas Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Consolidated Mining and BRNPB 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 BRNPB are associated (or correlated) with Atlas Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Consolidated Mining has no effect on the direction of BRNPB i.e., BRNPB and Atlas Consolidated go up and down completely randomly.

Pair Corralation between BRNPB and Atlas Consolidated

Assuming the 90 days trading horizon BRNPB is expected to generate 0.62 times more return on investment than Atlas Consolidated. However, BRNPB is 1.61 times less risky than Atlas Consolidated. It trades about 0.27 of its potential returns per unit of risk. Atlas Consolidated Mining is currently generating about -0.01 per unit of risk. If you would invest  10,400  in BRNPB on October 10, 2024 and sell it today you would earn a total of  390.00  from holding BRNPB or generate 3.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	44.44%
Values	Daily Returns

BRNPB  vs.  Atlas Consolidated Mining

BRNPB

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days BRNPB has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively unsteady basic indicators, BRNPB reported solid returns over the last few months and may actually be approaching a breakup point.

Atlas Consolidated Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BRNPB and Atlas Consolidated

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

The idea behind BRNPB and Atlas Consolidated Mining 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.