Correlation Between Old Market and Atlanticus Holdings

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

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

Diversification Opportunities for Old Market and Atlanticus Holdings

-0.32

Correlation Coefficient

Old Market  Atlanticus Holdings

Very good diversification

The 3 months correlation between Old and Atlanticus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Old Market Capital and Atlanticus Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings Corp and Old Market 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 Old Market Capital 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 Corp has no effect on the direction of Old Market i.e., Old Market and Atlanticus Holdings go up and down completely randomly.

Pair Corralation between Old Market and Atlanticus Holdings

Given the investment horizon of 90 days Old Market is expected to generate 3.84 times less return on investment than Atlanticus Holdings. In addition to that, Old Market is 1.89 times more volatile than Atlanticus Holdings Corp. It trades about 0.01 of its total potential returns per unit of risk. Atlanticus Holdings Corp is currently generating about 0.06 per unit of volatility. If you would invest  1,602  in Atlanticus Holdings Corp on September 5, 2024 and sell it today you would earn a total of  793.00  from holding Atlanticus Holdings Corp or generate 49.5% return on investment over 90 days.

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

Old Market Capital  vs.  Atlanticus Holdings Corp

Old Market Capital

Risk-Adjusted Performance

0 of 100

Weak

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

Atlanticus Holdings Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Atlanticus Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Old Market and Atlanticus Holdings

The main advantage of trading using opposite Old Market and Atlanticus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Market 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 Old Market Capital and Atlanticus Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.