Correlation Between Atlas Corp and Bunker Hill

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

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

Diversification Opportunities for Atlas Corp and Bunker Hill

0.46

Correlation Coefficient

Atlas Corp  Bunker Hill

Very weak diversification

The 3 months correlation between Atlas and Bunker is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and Bunker Hill Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunker Hill Mining and Atlas Corp 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 Corp are associated (or correlated) with Bunker Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunker Hill Mining has no effect on the direction of Atlas Corp i.e., Atlas Corp and Bunker Hill go up and down completely randomly.

Pair Corralation between Atlas Corp and Bunker Hill

Assuming the 90 days horizon Atlas Corp is expected to under-perform the Bunker Hill. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Corp is 4.97 times less risky than Bunker Hill. The stock trades about -0.05 of its potential returns per unit of risk. The Bunker Hill Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9.50  in Bunker Hill Mining on January 30, 2024 and sell it today you would earn a total of  0.50  from holding Bunker Hill Mining or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Atlas Corp  vs.  Bunker Hill Mining

Atlas Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlas Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Atlas Corp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bunker Hill Mining

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bunker Hill Mining are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Bunker Hill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atlas Corp and Bunker Hill

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

The idea behind Atlas Corp and Bunker Hill Mining 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.