Correlation Between Supremex and Atlas Engineered

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

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

Diversification Opportunities for Supremex and Atlas Engineered

0.4

Correlation Coefficient

Supremex  Atlas Engineered

Very weak diversification

The 3 months correlation between Supremex and Atlas is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Supremex 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 Supremex 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 Supremex 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 Supremex i.e., Supremex and Atlas Engineered go up and down completely randomly.

Pair Corralation between Supremex and Atlas Engineered

Assuming the 90 days trading horizon Supremex is expected to generate 1.27 times less return on investment than Atlas Engineered. But when comparing it to its historical volatility, Supremex is 1.28 times less risky than Atlas Engineered. It trades about 0.04 of its potential returns per unit of risk. Atlas Engineered Products is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  85.00  in Atlas Engineered Products on April 22, 2025 and sell it today you would earn a total of  4.00  from holding Atlas Engineered Products or generate 4.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Supremex  vs.  Atlas Engineered Products

Supremex

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Supremex are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Supremex is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Atlas Engineered Products

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Engineered Products are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Atlas Engineered may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Supremex and Atlas Engineered

The main advantage of trading using opposite Supremex and Atlas Engineered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supremex 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 Supremex 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.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.