Correlation Between Ramaco Resources, and Atlanticus Holdings

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

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

Diversification Opportunities for Ramaco Resources, and Atlanticus Holdings

0.52

Correlation Coefficient

Ramaco Resources,  Atlanticus Holdings

Very weak diversification

The 3 months correlation between Ramaco and Atlanticus is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ramaco Resources, and Atlanticus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings and Ramaco Resources, 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 Ramaco Resources, 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 Ramaco Resources, i.e., Ramaco Resources, and Atlanticus Holdings go up and down completely randomly.

Pair Corralation between Ramaco Resources, and Atlanticus Holdings

Assuming the 90 days horizon Ramaco Resources, is expected to generate 0.69 times more return on investment than Atlanticus Holdings. However, Ramaco Resources, is 1.45 times less risky than Atlanticus Holdings. It trades about -0.02 of its potential returns per unit of risk. Atlanticus Holdings is currently generating about -0.03 per unit of risk. If you would invest  2,573  in Ramaco Resources, on September 16, 2024 and sell it today you would lose (6.00) from holding Ramaco Resources, or give up 0.23% of portfolio value over 90 days.

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

Ramaco Resources,   vs.  Atlanticus Holdings

Ramaco Resources,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ramaco Resources, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Ramaco Resources, 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 Ramaco Resources, and Atlanticus Holdings

The main advantage of trading using opposite Ramaco Resources, and Atlanticus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramaco Resources, 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 Ramaco Resources, 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.