Correlation Between Gold Reserve and Atlas Corp

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

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

Diversification Opportunities for Gold Reserve and Atlas Corp

-0.73

Correlation Coefficient

Gold Reserve  Atlas Corp

Pay attention - limited upside

The 3 months correlation between Gold and Atlas is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gold Reserve and Atlas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Corp and Gold Reserve 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 Gold Reserve are associated (or correlated) with Atlas Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Corp has no effect on the direction of Gold Reserve i.e., Gold Reserve and Atlas Corp go up and down completely randomly.

Pair Corralation between Gold Reserve and Atlas Corp

Assuming the 90 days horizon Gold Reserve is expected to under-perform the Atlas Corp. In addition to that, Gold Reserve is 24.64 times more volatile than Atlas Corp. It trades about -0.09 of its total potential returns per unit of risk. Atlas Corp is currently generating about 0.08 per unit of volatility. If you would invest  2,470  in Atlas Corp on September 12, 2024 and sell it today you would earn a total of  46.00  from holding Atlas Corp or generate 1.86% return on investment over 90 days.

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

Gold Reserve  vs.  Atlas Corp

Gold Reserve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Reserve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Atlas Corp

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Gold Reserve and Atlas Corp

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

The idea behind Gold Reserve and Atlas Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.