Correlation Between Atlanticus Holdings and Old Market

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

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

Diversification Opportunities for Atlanticus Holdings and Old Market

-0.44

Correlation Coefficient

Atlanticus Holdings  Old Market

Very good diversification

The 3 months correlation between Atlanticus and Old is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings Corp and Old Market Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Market Capital and Atlanticus 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 Atlanticus Holdings Corp are associated (or correlated) with Old Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Market Capital has no effect on the direction of Atlanticus Holdings i.e., Atlanticus Holdings and Old Market go up and down completely randomly.

Pair Corralation between Atlanticus Holdings and Old Market

Assuming the 90 days horizon Atlanticus Holdings Corp is expected to generate 0.47 times more return on investment than Old Market. However, Atlanticus Holdings Corp is 2.11 times less risky than Old Market. It trades about 0.05 of its potential returns per unit of risk. Old Market Capital is currently generating about -0.01 per unit of risk. If you would invest  2,124  in Atlanticus Holdings Corp on September 14, 2024 and sell it today you would earn a total of  250.00  from holding Atlanticus Holdings Corp or generate 11.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Atlanticus Holdings Corp  vs.  Old Market Capital

Atlanticus Holdings Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Atlanticus Holdings is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Old Market Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Old Market Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Old Market is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Atlanticus Holdings and Old Market

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

The idea behind Atlanticus Holdings Corp and Old Market Capital 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.

Check out your portfolio center.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.