Correlation Between Atlas Corp and Canfor Pulp

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

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

Diversification Opportunities for Atlas Corp and Canfor Pulp

-0.16

Correlation Coefficient

Atlas Corp  Canfor Pulp

Good diversification

The 3 months correlation between Atlas and Canfor is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and Canfor Pulp Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor Pulp Products and Atlas Corp 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 Atlas Corp are associated (or correlated) with Canfor Pulp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor Pulp Products has no effect on the direction of Atlas Corp i.e., Atlas Corp and Canfor Pulp go up and down completely randomly.

Pair Corralation between Atlas Corp and Canfor Pulp

Assuming the 90 days horizon Atlas Corp is expected to generate 0.19 times more return on investment than Canfor Pulp. However, Atlas Corp is 5.33 times less risky than Canfor Pulp. It trades about 0.09 of its potential returns per unit of risk. Canfor Pulp Products is currently generating about -0.12 per unit of risk. If you would invest  2,500  in Atlas Corp on September 18, 2024 and sell it today you would earn a total of  12.00  from holding Atlas Corp or generate 0.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Atlas Corp  vs.  Canfor Pulp Products

Atlas Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Atlas Corp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Canfor Pulp Products

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canfor Pulp Products are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Canfor Pulp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Atlas Corp and Canfor Pulp

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

The idea behind Atlas Corp and Canfor Pulp Products 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.