Correlation Between Fathom Digital and Altus Power

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

By analyzing existing cross correlation between Fathom Digital Manufacturing and Altus Power, you can compare the effects of market volatilities on Fathom Digital and Altus Power 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 Fathom Digital with a short position of Altus Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fathom Digital and Altus Power.

Diversification Opportunities for Fathom Digital and Altus Power

-0.35

Correlation Coefficient

Fathom Digital  Altus Power

Very good diversification

The 3 months correlation between Fathom and Altus is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fathom Digital Manufacturing and Altus Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Power and Fathom Digital 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 Fathom Digital Manufacturing are associated (or correlated) with Altus Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Power has no effect on the direction of Fathom Digital i.e., Fathom Digital and Altus Power go up and down completely randomly.

Pair Corralation between Fathom Digital and Altus Power

If you would invest  297.00  in Altus Power on September 3, 2024 and sell it today you would earn a total of  135.00  from holding Altus Power or generate 45.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Fathom Digital Manufacturing  vs.  Altus Power

Fathom Digital Manuf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fathom Digital Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Fathom Digital is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Altus Power

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altus Power are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Altus Power unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fathom Digital and Altus Power

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

The idea behind Fathom Digital Manufacturing and Altus Power 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.