Correlation Between Fossil Group and Atlanticus Holdings

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

By analyzing existing cross correlation between Fossil Group 7 and Atlanticus Holdings, you can compare the effects of market volatilities on Fossil Group and Atlanticus Holdings 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 Fossil Group with a short position of Atlanticus Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil Group and Atlanticus Holdings.

Diversification Opportunities for Fossil Group and Atlanticus Holdings

0.33

Correlation Coefficient

Fossil Group  Atlanticus Holdings

Weak diversification

The 3 months correlation between Fossil and Atlanticus is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group 7 and Atlanticus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings and Fossil Group 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 Fossil Group 7 are associated (or correlated) with Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings has no effect on the direction of Fossil Group i.e., Fossil Group and Atlanticus Holdings go up and down completely randomly.

Pair Corralation between Fossil Group and Atlanticus Holdings

Assuming the 90 days horizon Fossil Group is expected to generate 4.08 times less return on investment than Atlanticus Holdings. In addition to that, Fossil Group is 2.33 times more volatile than Atlanticus Holdings. It trades about 0.01 of its total potential returns per unit of risk. Atlanticus Holdings is currently generating about 0.08 per unit of volatility. If you would invest  2,302  in Atlanticus Holdings on September 15, 2024 and sell it today you would earn a total of  74.00  from holding Atlanticus Holdings or generate 3.21% return on investment over 90 days.

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

Fossil Group 7  vs.  Atlanticus Holdings

Fossil Group 7

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fossil Group 7 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Fossil Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Atlanticus Holdings

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Fossil Group and Atlanticus Holdings

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

The idea behind Fossil Group 7 and Atlanticus Holdings 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.

Check out your portfolio center.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.