Correlation Between Atlas Financial and Chubb

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

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

Diversification Opportunities for Atlas Financial and Chubb

0.0

Correlation Coefficient

Atlas Financial  Chubb

Pay attention - limited upside

The 3 months correlation between Atlas and Chubb is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Financial Holdings and Chubb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chubb and Atlas Financial 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 Financial Holdings are associated (or correlated) with Chubb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chubb has no effect on the direction of Atlas Financial i.e., Atlas Financial and Chubb go up and down completely randomly.

Pair Corralation between Atlas Financial and Chubb

If you would invest  19,103  in Chubb on January 19, 2024 and sell it today you would earn a total of  5,436  from holding Chubb or generate 28.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Atlas Financial Holdings  vs.  Chubb

Atlas Financial Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Chubb

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chubb are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Chubb is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atlas Financial and Chubb

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

The idea behind Atlas Financial Holdings and Chubb 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.