Correlation Between Atok Big and Lepanto Consolidated
Can any of the company-specific risk be diversified away by investing in both Atok Big and Lepanto Consolidated 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 Atok Big and Lepanto Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atok Big Wedge and Lepanto Consolidated Mining, you can compare the effects of market volatilities on Atok Big and Lepanto Consolidated 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 Atok Big with a short position of Lepanto Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atok Big and Lepanto Consolidated.
Diversification Opportunities for Atok Big and Lepanto Consolidated
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Atok and Lepanto is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Atok Big Wedge and Lepanto Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepanto Consolidated and Atok Big 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 Atok Big Wedge are associated (or correlated) with Lepanto Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepanto Consolidated has no effect on the direction of Atok Big i.e., Atok Big and Lepanto Consolidated go up and down completely randomly.
Pair Corralation between Atok Big and Lepanto Consolidated
Assuming the 90 days trading horizon Atok Big Wedge is expected to generate 2.8 times more return on investment than Lepanto Consolidated. However, Atok Big is 2.8 times more volatile than Lepanto Consolidated Mining. It trades about 0.02 of its potential returns per unit of risk. Lepanto Consolidated Mining is currently generating about -0.03 per unit of risk. If you would invest 609.00 in Atok Big Wedge on August 29, 2024 and sell it today you would lose (249.00) from holding Atok Big Wedge or give up 40.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.78% |
| Values | Daily Returns |
Atok Big Wedge vs. Lepanto Consolidated Mining
Performance |
| Timeline |
| Atok Big Wedge |
| Lepanto Consolidated |
Atok Big and Lepanto Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atok Big and Lepanto Consolidated
The main advantage of trading using opposite Atok Big and Lepanto Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atok Big position performs unexpectedly, Lepanto Consolidated 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 Lepanto Consolidated will offset losses from the drop in Lepanto Consolidated's long position.| Atok Big vs. Lepanto Consolidated Mining | Atok Big vs. SM Investments Corp | Atok Big vs. Converge Information Communications | Atok Big vs. Atlas Consolidated Mining |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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