Correlation Between Atlas Corp and Jupai Holdings

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

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

Diversification Opportunities for Atlas Corp and Jupai Holdings

-0.33

Correlation Coefficient

Atlas Corp  Jupai Holdings

Very good diversification

The 3 months correlation between Atlas and Jupai is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Corp and Jupai Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupai Holdings and Atlas Corp 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 Atlas Corp are associated (or correlated) with Jupai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupai Holdings has no effect on the direction of Atlas Corp i.e., Atlas Corp and Jupai Holdings go up and down completely randomly.

Pair Corralation between Atlas Corp and Jupai Holdings

If you would invest  2,531  in Atlas Corp on July 18, 2024 and sell it today you would earn a total of  24.00  from holding Atlas Corp or generate 0.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.35%
Values	Daily Returns

Atlas Corp  vs.  Jupai Holdings Limited

Atlas Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Atlas Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Jupai Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupai Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Jupai Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atlas Corp and Jupai Holdings

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

The idea behind Atlas Corp and Jupai Holdings Limited 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.