Correlation Between Caldwell Partners and Atlas Engineered

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

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

Diversification Opportunities for Caldwell Partners and Atlas Engineered

0.89

Correlation Coefficient

Caldwell Partners  Atlas Engineered

Very poor diversification

The 3 months correlation between Caldwell and Atlas is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Caldwell Partners Internationa and Atlas Engineered Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Engineered Products and Caldwell Partners 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 Caldwell Partners International are associated (or correlated) with Atlas Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Engineered Products has no effect on the direction of Caldwell Partners i.e., Caldwell Partners and Atlas Engineered go up and down completely randomly.

Pair Corralation between Caldwell Partners and Atlas Engineered

Assuming the 90 days trading horizon Caldwell Partners International is expected to generate 1.55 times more return on investment than Atlas Engineered. However, Caldwell Partners is 1.55 times more volatile than Atlas Engineered Products. It trades about -0.09 of its potential returns per unit of risk. Atlas Engineered Products is currently generating about -0.2 per unit of risk. If you would invest  122.00  in Caldwell Partners International on December 30, 2024 and sell it today you would lose (33.00) from holding Caldwell Partners International or give up 27.05% of portfolio value over 90 days.

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

Caldwell Partners Internationa  vs.  Atlas Engineered Products

Caldwell Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caldwell Partners International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Atlas Engineered Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlas Engineered Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Caldwell Partners and Atlas Engineered

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

The idea behind Caldwell Partners International and Atlas Engineered Products 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.