Correlation Between Western Copper and Atlas Air

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Can any of the company-specific risk be diversified away by investing in both Western Copper and Atlas Air 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 Western Copper and Atlas Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper And and Atlas Air Worldwide, you can compare the effects of market volatilities on Western Copper and Atlas Air 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 Western Copper with a short position of Atlas Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Atlas Air.

Diversification Opportunities for Western Copper and Atlas Air

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Western and Atlas is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper And and Atlas Air Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Air Worldwide and Western Copper 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 Western Copper And are associated (or correlated) with Atlas Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Air Worldwide has no effect on the direction of Western Copper i.e., Western Copper and Atlas Air go up and down completely randomly.

Pair Corralation between Western Copper and Atlas Air

If you would invest  115.00  in Western Copper And on December 29, 2023 and sell it today you would earn a total of  38.00  from holding Western Copper And or generate 33.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy4.35%
ValuesDaily Returns

Western Copper And  vs.  Atlas Air Worldwide

 Performance 
       Timeline  
Western Copper And 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Western Copper And are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Western Copper displayed solid returns over the last few months and may actually be approaching a breakup point.
Atlas Air Worldwide 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Western Copper and Atlas Air Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Western Copper and Atlas Air

The main advantage of trading using opposite Western Copper and Atlas Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Atlas Air 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 Air will offset losses from the drop in Atlas Air's long position.
The idea behind Western Copper And and Atlas Air Worldwide 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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