Correlation Between ADF and Atlas Engineered

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

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

Diversification Opportunities for ADF and Atlas Engineered

-0.06

Correlation Coefficient

ADF  Atlas Engineered

Good diversification

The 3 months correlation between ADF and Atlas is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ADF Group and Atlas Engineered Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Engineered Products and ADF 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 ADF Group are associated (or correlated) with Atlas Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Engineered Products has no effect on the direction of ADF i.e., ADF and Atlas Engineered go up and down completely randomly.

Pair Corralation between ADF and Atlas Engineered

Assuming the 90 days trading horizon ADF Group is expected to generate 1.89 times more return on investment than Atlas Engineered. However, ADF is 1.89 times more volatile than Atlas Engineered Products. It trades about 0.07 of its potential returns per unit of risk. Atlas Engineered Products is currently generating about 0.02 per unit of risk. If you would invest  747.00  in ADF Group on May 17, 2025 and sell it today you would earn a total of  121.00  from holding ADF Group or generate 16.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

ADF Group  vs.  Atlas Engineered Products

ADF Group

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in ADF Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, ADF displayed solid returns over the last few months and may actually be approaching a breakup point.

Atlas Engineered Products

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Engineered Products are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Atlas Engineered is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ADF and Atlas Engineered

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

The idea behind ADF Group and Atlas Engineered Products 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.