Correlation Between Hampton Financial and Atrium Mortgage

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hampton Financial and Atrium Mortgage 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 Hampton Financial and Atrium Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hampton Financial Corp and Atrium Mortgage Investment, you can compare the effects of market volatilities on Hampton Financial and Atrium Mortgage 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 Hampton Financial with a short position of Atrium Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hampton Financial and Atrium Mortgage.

Diversification Opportunities for Hampton Financial and Atrium Mortgage

HamptonAtriumDiversified AwayHamptonAtriumDiversified Away100%
-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hampton and Atrium is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hampton Financial Corp and Atrium Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Mortgage Inve and Hampton Financial 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 Hampton Financial Corp are associated (or correlated) with Atrium Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Mortgage Inve has no effect on the direction of Hampton Financial i.e., Hampton Financial and Atrium Mortgage go up and down completely randomly.

Pair Corralation between Hampton Financial and Atrium Mortgage

Assuming the 90 days horizon Hampton Financial Corp is expected to generate 3.71 times more return on investment than Atrium Mortgage. However, Hampton Financial is 3.71 times more volatile than Atrium Mortgage Investment. It trades about 0.18 of its potential returns per unit of risk. Atrium Mortgage Investment is currently generating about -0.18 per unit of risk. If you would invest  41.00  in Hampton Financial Corp on October 11, 2024 and sell it today you would earn a total of  4.00  from holding Hampton Financial Corp or generate 9.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Hampton Financial Corp  vs.  Atrium Mortgage Investment

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-505
JavaScript chart by amCharts 3.21.15HFC AI
       Timeline  
Hampton Financial Corp 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Hampton Financial Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Hampton Financial is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.40.410.420.430.440.450.46
Atrium Mortgage Inve 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Atrium Mortgage Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Atrium Mortgage is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan10.810.91111.111.211.311.4

Hampton Financial and Atrium Mortgage Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.11-4.58-3.04-1.510.01.533.084.646.19 0.20.40.60.81.0
JavaScript chart by amCharts 3.21.15HFC AI
       Returns  

Pair Trading with Hampton Financial and Atrium Mortgage

The main advantage of trading using opposite Hampton Financial and Atrium Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hampton Financial position performs unexpectedly, Atrium Mortgage 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 Atrium Mortgage will offset losses from the drop in Atrium Mortgage's long position.
The idea behind Hampton Financial Corp and Atrium Mortgage Investment 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

Other Complementary Tools

Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Commodity Directory
Find actively traded commodities issued by global exchanges
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins