Correlation Between Stagwell and Chicago Atlantic

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

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

Diversification Opportunities for Stagwell and Chicago Atlantic

0.46

Correlation Coefficient

Stagwell  Chicago Atlantic

Very weak diversification

The 3 months correlation between Stagwell and Chicago is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and Chicago Atlantic BDC, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Atlantic BDC, and Stagwell 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 Stagwell are associated (or correlated) with Chicago Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Atlantic BDC, has no effect on the direction of Stagwell i.e., Stagwell and Chicago Atlantic go up and down completely randomly.

Pair Corralation between Stagwell and Chicago Atlantic

Given the investment horizon of 90 days Stagwell is expected to under-perform the Chicago Atlantic. In addition to that, Stagwell is 1.19 times more volatile than Chicago Atlantic BDC,. It trades about -0.05 of its total potential returns per unit of risk. Chicago Atlantic BDC, is currently generating about -0.05 per unit of volatility. If you would invest  1,228  in Chicago Atlantic BDC, on December 21, 2024 and sell it today you would lose (92.00) from holding Chicago Atlantic BDC, or give up 7.49% of portfolio value over 90 days.

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

Stagwell  vs.  Chicago Atlantic BDC,

Stagwell

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stagwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Chicago Atlantic BDC,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chicago Atlantic BDC, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Stagwell and Chicago Atlantic

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

The idea behind Stagwell and Chicago Atlantic BDC, 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.