Correlation Between Generation Asia and Atlas Resources

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

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

Diversification Opportunities for Generation Asia and Atlas Resources

0.0

Correlation Coefficient

Generation Asia  Atlas Resources

Pay attention - limited upside

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

Pair Corralation between Generation Asia and Atlas Resources

Considering the 90-day investment horizon Generation Asia is expected to generate 60.89 times less return on investment than Atlas Resources. But when comparing it to its historical volatility, Generation Asia I is 61.31 times less risky than Atlas Resources. It trades about 0.04 of its potential returns per unit of risk. Atlas Resources International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  5.10  in Atlas Resources International on October 10, 2024 and sell it today you would lose (5.00) from holding Atlas Resources International or give up 98.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	92.53%
Values	Daily Returns

Generation Asia I  vs.  Atlas Resources International

Generation Asia I

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Generation Asia I has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Generation Asia is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Atlas Resources Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlas Resources International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Atlas Resources is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Generation Asia and Atlas Resources

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

The idea behind Generation Asia I and Atlas Resources International 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.