Correlation Between All Iron and Atrys Health

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

By analyzing existing cross correlation between All Iron Re and Atrys Health SL, you can compare the effects of market volatilities on All Iron and Atrys Health 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 All Iron with a short position of Atrys Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Iron and Atrys Health.

Diversification Opportunities for All Iron and Atrys Health

-0.38

Correlation Coefficient

All Iron  Atrys Health

Very good diversification

The 3 months correlation between All and Atrys is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding All Iron Re and Atrys Health SL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrys Health SL and All Iron 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 All Iron Re are associated (or correlated) with Atrys Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrys Health SL has no effect on the direction of All Iron i.e., All Iron and Atrys Health go up and down completely randomly.

Pair Corralation between All Iron and Atrys Health

Assuming the 90 days trading horizon All Iron Re is expected to generate 1.1 times more return on investment than Atrys Health. However, All Iron is 1.1 times more volatile than Atrys Health SL. It trades about -0.06 of its potential returns per unit of risk. Atrys Health SL is currently generating about -0.13 per unit of risk. If you would invest  1,080  in All Iron Re on September 12, 2024 and sell it today you would lose (30.00) from holding All Iron Re or give up 2.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

All Iron Re  vs.  Atrys Health SL

All Iron Re

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in All Iron Re are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, All Iron may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Atrys Health SL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atrys Health SL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Atrys Health is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with All Iron and Atrys Health

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

The idea behind All Iron Re and Atrys Health SL 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.