Correlation Between Chicago Atlantic and Natera

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

By analyzing existing cross correlation between Chicago Atlantic BDC, and Natera Inc, you can compare the effects of market volatilities on Chicago Atlantic and Natera 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 Chicago Atlantic with a short position of Natera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Atlantic and Natera.

Diversification Opportunities for Chicago Atlantic and Natera

0.29

Correlation Coefficient

Chicago Atlantic  Natera

Modest diversification

The 3 months correlation between Chicago and Natera is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic BDC, and Natera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natera Inc and Chicago Atlantic 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 Chicago Atlantic BDC, are associated (or correlated) with Natera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natera Inc has no effect on the direction of Chicago Atlantic i.e., Chicago Atlantic and Natera go up and down completely randomly.

Pair Corralation between Chicago Atlantic and Natera

Given the investment horizon of 90 days Chicago Atlantic BDC, is expected to generate 0.45 times more return on investment than Natera. However, Chicago Atlantic BDC, is 2.22 times less risky than Natera. It trades about -0.01 of its potential returns per unit of risk. Natera Inc is currently generating about -0.02 per unit of risk. If you would invest  1,239  in Chicago Atlantic BDC, on September 24, 2024 and sell it today you would lose (4.00) from holding Chicago Atlantic BDC, or give up 0.32% of portfolio value over 90 days.

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

Chicago Atlantic BDC,  vs.  Natera Inc

Chicago Atlantic BDC,

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic BDC, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Chicago Atlantic displayed solid returns over the last few months and may actually be approaching a breakup point.

Natera Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Natera Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Natera sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chicago Atlantic and Natera

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

The idea behind Chicago Atlantic BDC, and Natera Inc 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.