Correlation Between ATN International and American Coastal

Can any of the company-specific risk be diversified away by investing in both ATN International and American Coastal 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 ATN International and American Coastal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATN International and American Coastal Insurance, you can compare the effects of market volatilities on ATN International and American Coastal 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 ATN International with a short position of American Coastal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATN International and American Coastal.

Diversification Opportunities for ATN International and American Coastal

-0.15

Correlation Coefficient

ATN International  American Coastal

Good diversification

The 3 months correlation between ATN and American is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ATN International and American Coastal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Coastal Ins and ATN International 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 ATN International are associated (or correlated) with American Coastal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Coastal Ins has no effect on the direction of ATN International i.e., ATN International and American Coastal go up and down completely randomly.

Pair Corralation between ATN International and American Coastal

Given the investment horizon of 90 days ATN International is expected to generate 1.12 times more return on investment than American Coastal. However, ATN International is 1.12 times more volatile than American Coastal Insurance. It trades about 0.06 of its potential returns per unit of risk. American Coastal Insurance is currently generating about -0.1 per unit of risk. If you would invest  1,585  in ATN International on May 5, 2025 and sell it today you would earn a total of  114.00  from holding ATN International or generate 7.19% return on investment over 90 days.

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

ATN International  vs.  American Coastal Insurance

ATN International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ATN International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, ATN International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

American Coastal Ins

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Coastal Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ATN International and American Coastal

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

The idea behind ATN International and American Coastal Insurance 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.