Correlation Between ATIF Holdings and Waste Connections

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

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

Diversification Opportunities for ATIF Holdings and Waste Connections

-0.63

Correlation Coefficient

ATIF Holdings  Waste Connections

Excellent diversification

The 3 months correlation between ATIF and Waste is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ATIF Holdings and Waste Connections in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Connections and ATIF Holdings 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 ATIF Holdings are associated (or correlated) with Waste Connections. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Connections has no effect on the direction of ATIF Holdings i.e., ATIF Holdings and Waste Connections go up and down completely randomly.

Pair Corralation between ATIF Holdings and Waste Connections

Given the investment horizon of 90 days ATIF Holdings is expected to under-perform the Waste Connections. In addition to that, ATIF Holdings is 5.44 times more volatile than Waste Connections. It trades about 0.0 of its total potential returns per unit of risk. Waste Connections is currently generating about 0.02 per unit of volatility. If you would invest  18,536  in Waste Connections on September 12, 2024 and sell it today you would earn a total of  43.00  from holding Waste Connections or generate 0.23% return on investment over 90 days.

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

ATIF Holdings  vs.  Waste Connections

ATIF Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATIF Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Waste Connections

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waste Connections has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Waste Connections is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ATIF Holdings and Waste Connections

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

The idea behind ATIF Holdings and Waste Connections 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..