Correlation Between Chicago Atlantic and 784730AB9

Can any of the company-specific risk be diversified away by investing in both Chicago Atlantic and 784730AB9 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 Chicago Atlantic and 784730AB9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chicago Atlantic BDC, and US784730AB94, you can compare the effects of market volatilities on Chicago Atlantic and 784730AB9 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 Chicago Atlantic with a short position of 784730AB9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Atlantic and 784730AB9.

Diversification Opportunities for Chicago Atlantic and 784730AB9

0.26

Correlation Coefficient

Chicago Atlantic  784730AB9

Modest diversification

The 3 months correlation between Chicago and 784730AB9 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic BDC, and US784730AB94 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US784730AB94 and Chicago Atlantic 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 Chicago Atlantic BDC, are associated (or correlated) with 784730AB9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US784730AB94 has no effect on the direction of Chicago Atlantic i.e., Chicago Atlantic and 784730AB9 go up and down completely randomly.

Pair Corralation between Chicago Atlantic and 784730AB9

Given the investment horizon of 90 days Chicago Atlantic BDC, is expected to under-perform the 784730AB9. But the stock apears to be less risky and, when comparing its historical volatility, Chicago Atlantic BDC, is 5.49 times less risky than 784730AB9. The stock trades about -0.16 of its potential returns per unit of risk. The US784730AB94 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  9,550  in US784730AB94 on October 1, 2024 and sell it today you would earn a total of  202.00  from holding US784730AB94 or generate 2.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	42.86%
Values	Daily Returns

Chicago Atlantic BDC,  vs.  US784730AB94

Chicago Atlantic BDC,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic BDC, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Chicago Atlantic displayed solid returns over the last few months and may actually be approaching a breakup point.

US784730AB94

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in US784730AB94 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 784730AB9 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Chicago Atlantic and 784730AB9

The main advantage of trading using opposite Chicago Atlantic and 784730AB9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic position performs unexpectedly, 784730AB9 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 784730AB9 will offset losses from the drop in 784730AB9's long position.

The idea behind Chicago Atlantic BDC, and US784730AB94 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.