Correlation Between Atlas Air and HomeTrust Bancshares

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

By analyzing existing cross correlation between Atlas Air Worldwide and HomeTrust Bancshares, you can compare the effects of market volatilities on Atlas Air and HomeTrust Bancshares 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 Atlas Air with a short position of HomeTrust Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Air and HomeTrust Bancshares.

Diversification Opportunities for Atlas Air and HomeTrust Bancshares

-0.14

Correlation Coefficient

Atlas Air  HomeTrust Bancshares

Good diversification

The 3 months correlation between Atlas and HomeTrust is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Air Worldwide and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares and Atlas Air 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 Atlas Air Worldwide are associated (or correlated) with HomeTrust Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeTrust Bancshares has no effect on the direction of Atlas Air i.e., Atlas Air and HomeTrust Bancshares go up and down completely randomly.

Pair Corralation between Atlas Air and HomeTrust Bancshares

If you would invest  2,602  in HomeTrust Bancshares on January 25, 2024 and sell it today you would earn a total of  20.00  from holding HomeTrust Bancshares or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Atlas Air Worldwide  vs.  HomeTrust Bancshares

Atlas Air Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlas Air Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Atlas Air is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

HomeTrust Bancshares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HomeTrust Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Atlas Air and HomeTrust Bancshares

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

The idea behind Atlas Air Worldwide and HomeTrust Bancshares 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.