Correlation Between Chubb and Atlas Financial

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

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

Diversification Opportunities for Chubb and Atlas Financial

0.0

Correlation Coefficient

Chubb  Atlas Financial

Pay attention - limited upside

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

Pair Corralation between Chubb and Atlas Financial

If you would invest (100.00) in Atlas Financial Holdings on January 18, 2024 and sell it today you would earn a total of  100.00  from holding Atlas Financial Holdings or generate -100.0% return on investment over 90 days.

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

Chubb  vs.  Atlas Financial Holdings

Chubb

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chubb are ranked lower than 9 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Chubb and Atlas Financial

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

The idea behind Chubb and Atlas Financial Holdings 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.