Correlation Between Utah Medical and Atlas Air

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

By analyzing existing cross correlation between Utah Medical Products and Atlas Air Worldwide, you can compare the effects of market volatilities on Utah Medical and Atlas Air 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 Utah Medical with a short position of Atlas Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utah Medical and Atlas Air.

Diversification Opportunities for Utah Medical and Atlas Air

0.36

Correlation Coefficient

Utah Medical  Atlas Air

Weak diversification

The 3 months correlation between Utah and Atlas is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Utah Medical Products and Atlas Air Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Air Worldwide and Utah Medical 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 Utah Medical Products are associated (or correlated) with Atlas Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Air Worldwide has no effect on the direction of Utah Medical i.e., Utah Medical and Atlas Air go up and down completely randomly.

Pair Corralation between Utah Medical and Atlas Air

Given the investment horizon of 90 days Utah Medical Products is expected to under-perform the Atlas Air. In addition to that, Utah Medical is 2.79 times more volatile than Atlas Air Worldwide. It trades about -0.04 of its total potential returns per unit of risk. Atlas Air Worldwide is currently generating about 0.03 per unit of volatility. If you would invest  10,178  in Atlas Air Worldwide on October 10, 2024 and sell it today you would earn a total of  70.00  from holding Atlas Air Worldwide or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	8.89%
Values	Daily Returns

Utah Medical Products  vs.  Atlas Air Worldwide

Utah Medical Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Utah Medical Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Atlas Air Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlas Air Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Atlas Air is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Utah Medical and Atlas Air

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

The idea behind Utah Medical Products and Atlas Air Worldwide 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.