Correlation Between Link Net and Atlas Resources

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

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

Diversification Opportunities for Link Net and Atlas Resources

-0.52

Correlation Coefficient

Link Net  Atlas Resources

Excellent diversification

The 3 months correlation between Link and Atlas is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Link Net Tbk and Atlas Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Resources Tbk and Link Net 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 Link Net Tbk are associated (or correlated) with Atlas Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Resources Tbk has no effect on the direction of Link Net i.e., Link Net and Atlas Resources go up and down completely randomly.

Pair Corralation between Link Net and Atlas Resources

Assuming the 90 days trading horizon Link Net Tbk is expected to under-perform the Atlas Resources. But the stock apears to be less risky and, when comparing its historical volatility, Link Net Tbk is 1.59 times less risky than Atlas Resources. The stock trades about -0.32 of its potential returns per unit of risk. The Atlas Resources Tbk is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  26,400  in Atlas Resources Tbk on February 4, 2024 and sell it today you would earn a total of  3,200  from holding Atlas Resources Tbk or generate 12.12% return on investment over 90 days.

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

Link Net Tbk  vs.  Atlas Resources Tbk

Link Net Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Link Net Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Atlas Resources Tbk

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Resources Tbk are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Atlas Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Link Net and Atlas Resources

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

The idea behind Link Net Tbk and Atlas Resources Tbk 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.