Correlation Between United Fire and Atlassian Cls

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

Diversification Opportunities for United Fire and Atlassian Cls

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between United and Atlassian is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group and Atlassian Cls A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlassian Cls A and United Fire 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 United Fire Group are associated (or correlated) with Atlassian Cls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlassian Cls A has no effect on the direction of United Fire i.e., United Fire and Atlassian Cls go up and down completely randomly.

Pair Corralation between United Fire and Atlassian Cls

Given the investment horizon of 90 days United Fire Group is expected to under-perform the Atlassian Cls. But the stock apears to be less risky and, when comparing its historical volatility, United Fire Group is 1.01 times less risky than Atlassian Cls. The stock trades about -0.14 of its potential returns per unit of risk. The Atlassian Cls A is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  21,408  in Atlassian Cls A on May 9, 2022 and sell it today you would earn a total of  5,451  from holding Atlassian Cls A or generate 25.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

United Fire Group  vs.  Atlassian Cls A

 Performance (%) 
       Timeline  
United Fire Group 
United Performance
0 of 100
Over the last 90 days United Fire Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, United Fire is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

United Price Channel

Atlassian Cls A 
Atlassian Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Atlassian Cls A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Atlassian Cls revealed solid returns over the last few months and may actually be approaching a breakup point.

Atlassian Price Channel

United Fire and Atlassian Cls Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with United Fire and Atlassian Cls

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

United Fire Group

Pair trading matchups for United Fire

The idea behind United Fire Group and Atlassian Cls A 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.

Atlassian Cls A

Pair trading matchups for Atlassian Cls

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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