Correlation Between Movie Studio and Atacama Resources

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

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

Diversification Opportunities for Movie Studio and Atacama Resources

-0.24

Correlation Coefficient

Movie Studio  Atacama Resources

Very good diversification

The 3 months correlation between Movie and Atacama is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Movie Studio and Atacama Resources Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacama Resources and Movie Studio 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 Movie Studio are associated (or correlated) with Atacama Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacama Resources has no effect on the direction of Movie Studio i.e., Movie Studio and Atacama Resources go up and down completely randomly.

Pair Corralation between Movie Studio and Atacama Resources

Given the investment horizon of 90 days Movie Studio is expected to generate 1.43 times less return on investment than Atacama Resources. But when comparing it to its historical volatility, Movie Studio is 1.16 times less risky than Atacama Resources. It trades about 0.03 of its potential returns per unit of risk. Atacama Resources International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.15  in Atacama Resources International on May 4, 2025 and sell it today you would lose (0.02) from holding Atacama Resources International or give up 13.33% of portfolio value over 90 days.

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

Movie Studio  vs.  Atacama Resources Internationa

Movie Studio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Movie Studio are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Movie Studio unveiled solid returns over the last few months and may actually be approaching a breakup point.

Atacama Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atacama Resources International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Atacama Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Movie Studio and Atacama Resources

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

The idea behind Movie Studio and Atacama Resources International 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.