Correlation Between Concepcion Industrial and Atlas Consolidated

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

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

Diversification Opportunities for Concepcion Industrial and Atlas Consolidated

0.67

Correlation Coefficient

Concepcion Industrial  Atlas Consolidated

Poor diversification

The 3 months correlation between Concepcion and Atlas is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp 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 Concepcion Industrial 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 Concepcion Industrial Corp 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 Concepcion Industrial i.e., Concepcion Industrial and Atlas Consolidated go up and down completely randomly.

Pair Corralation between Concepcion Industrial and Atlas Consolidated

Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to under-perform the Atlas Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Concepcion Industrial Corp is 1.17 times less risky than Atlas Consolidated. The stock trades about -0.01 of its potential returns per unit of risk. The Atlas Consolidated Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  407.00  in Atlas Consolidated Mining on September 5, 2024 and sell it today you would earn a total of  16.00  from holding Atlas Consolidated Mining or generate 3.93% return on investment over 90 days.

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

Concepcion Industrial Corp  vs.  Atlas Consolidated Mining

Concepcion Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concepcion Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Concepcion Industrial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Atlas Consolidated Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Consolidated Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Atlas Consolidated is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Concepcion Industrial and Atlas Consolidated

The main advantage of trading using opposite Concepcion Industrial and Atlas Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concepcion Industrial 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 Concepcion Industrial Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.