Correlation Between Nasdaq and Atlas Consolidated

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

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

Diversification Opportunities for Nasdaq and Atlas Consolidated

-0.13

Correlation Coefficient

Nasdaq  Atlas Consolidated

Good diversification

The 3 months correlation between Nasdaq and Atlas is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Atlas Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Consolidated Mining and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Atlas Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Consolidated Mining has no effect on the direction of Nasdaq i.e., Nasdaq and Atlas Consolidated go up and down completely randomly.

Pair Corralation between Nasdaq and Atlas Consolidated

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.54 times more return on investment than Atlas Consolidated. However, Nasdaq Inc is 1.85 times less risky than Atlas Consolidated. It trades about 0.12 of its potential returns per unit of risk. Atlas Consolidated Mining is currently generating about 0.05 per unit of risk. If you would invest  5,831  in Nasdaq Inc on December 2, 2024 and sell it today you would earn a total of  2,447  from holding Nasdaq Inc or generate 41.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.76%
Values	Daily Returns

Nasdaq Inc  vs.  Atlas Consolidated Mining

Nasdaq Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Atlas Consolidated Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlas Consolidated Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Atlas Consolidated is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nasdaq and Atlas Consolidated

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

The idea behind Nasdaq Inc and Atlas Consolidated Mining 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.