Correlation Between ATCO and South Bow
Can any of the company-specific risk be diversified away by investing in both ATCO and South Bow 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 ATCO and South Bow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATCO and South Bow, you can compare the effects of market volatilities on ATCO and South Bow 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 ATCO with a short position of South Bow. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATCO and South Bow.
Diversification Opportunities for ATCO and South Bow
Very good diversification
The 3 months correlation between ATCO and South is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding ATCO and South Bow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Bow and ATCO 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 ATCO are associated (or correlated) with South Bow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Bow has no effect on the direction of ATCO i.e., ATCO and South Bow go up and down completely randomly.
Pair Corralation between ATCO and South Bow
Assuming the 90 days trading horizon ATCO is expected to generate 1.55 times more return on investment than South Bow. However, ATCO is 1.55 times more volatile than South Bow. It trades about 0.21 of its potential returns per unit of risk. South Bow is currently generating about 0.01 per unit of risk. If you would invest 5,012 in ATCO on September 5, 2025 and sell it today you would earn a total of 1,438 from holding ATCO or generate 28.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
ATCO vs. South Bow
Performance |
| Timeline |
| ATCO |
| South Bow |
ATCO and South Bow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATCO and South Bow
The main advantage of trading using opposite ATCO and South Bow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATCO position performs unexpectedly, South Bow 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 South Bow will offset losses from the drop in South Bow's long position.| ATCO vs. Atrium Mortgage Investment | ATCO vs. Brookfield Investments | ATCO vs. Canadian General Investments | ATCO vs. Dream Office Real |
| South Bow vs. Domestic Metals Corp | South Bow vs. Evertz Technologies Limited | South Bow vs. Jack Nathan Medical | South Bow vs. Nexoptic Technology Corp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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