Correlation Between Atinum Investment and HuMC

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

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

Diversification Opportunities for Atinum Investment and HuMC

-0.23

Correlation Coefficient

Atinum Investment  HuMC

Very good diversification

The 3 months correlation between Atinum and HuMC is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Atinum Investment Co and HuMC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HuMC and Atinum Investment 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 Atinum Investment Co are associated (or correlated) with HuMC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HuMC has no effect on the direction of Atinum Investment i.e., Atinum Investment and HuMC go up and down completely randomly.

Pair Corralation between Atinum Investment and HuMC

Assuming the 90 days trading horizon Atinum Investment Co is expected to generate 2.83 times more return on investment than HuMC. However, Atinum Investment is 2.83 times more volatile than HuMC Co. It trades about 0.01 of its potential returns per unit of risk. HuMC Co is currently generating about -0.13 per unit of risk. If you would invest  237,500  in Atinum Investment Co on September 4, 2024 and sell it today you would lose (500.00) from holding Atinum Investment Co or give up 0.21% of portfolio value over 90 days.

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

Atinum Investment Co  vs.  HuMC Co

Atinum Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atinum Investment Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Atinum Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

HuMC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HuMC Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Atinum Investment and HuMC

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

The idea behind Atinum Investment Co and HuMC Co 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..