Correlation Between Natera and Chicago Atlantic

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

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

Diversification Opportunities for Natera and Chicago Atlantic

0.29

Correlation Coefficient

Natera  Chicago Atlantic

Modest diversification

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

Pair Corralation between Natera and Chicago Atlantic

Given the investment horizon of 90 days Natera Inc is expected to generate 2.4 times more return on investment than Chicago Atlantic. However, Natera is 2.4 times more volatile than Chicago Atlantic BDC,. It trades about 0.14 of its potential returns per unit of risk. Chicago Atlantic BDC, is currently generating about 0.17 per unit of risk. If you would invest  12,308  in Natera Inc on September 24, 2024 and sell it today you would earn a total of  3,880  from holding Natera Inc or generate 31.52% return on investment over 90 days.

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

Natera Inc  vs.  Chicago Atlantic BDC,

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.

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.

Pair Trading with Natera and Chicago Atlantic

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

The idea behind Natera Inc and Chicago Atlantic BDC, 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.