Correlation Between Abingdon Health and Atalaya Mining
Can any of the company-specific risk be diversified away by investing in both Abingdon Health and Atalaya Mining 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 Abingdon Health and Atalaya Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and Atalaya Mining, you can compare the effects of market volatilities on Abingdon Health and Atalaya Mining 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 Abingdon Health with a short position of Atalaya Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Atalaya Mining.
Diversification Opportunities for Abingdon Health and Atalaya Mining
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Abingdon and Atalaya is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining and Abingdon Health 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 Abingdon Health Plc are associated (or correlated) with Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Abingdon Health i.e., Abingdon Health and Atalaya Mining go up and down completely randomly.
Pair Corralation between Abingdon Health and Atalaya Mining
Assuming the 90 days trading horizon Abingdon Health Plc is expected to generate 1.46 times more return on investment than Atalaya Mining. However, Abingdon Health is 1.46 times more volatile than Atalaya Mining. It trades about 0.03 of its potential returns per unit of risk. Atalaya Mining is currently generating about -0.05 per unit of risk. If you would invest 775.00 in Abingdon Health Plc on November 7, 2024 and sell it today you would earn a total of 25.00 from holding Abingdon Health Plc or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abingdon Health Plc vs. Atalaya Mining
Performance |
| Timeline |
| Abingdon Health Plc |
| Atalaya Mining |
Abingdon Health and Atalaya Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abingdon Health and Atalaya Mining
The main advantage of trading using opposite Abingdon Health and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health position performs unexpectedly, Atalaya Mining 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 Atalaya Mining will offset losses from the drop in Atalaya Mining's long position.| Abingdon Health vs. Vitec Software Group | Abingdon Health vs. Herald Investment Trust | Abingdon Health vs. Take Two Interactive Software | Abingdon Health vs. Chrysalis Investments |
| Atalaya Mining vs. Wheaton Precious Metals | Atalaya Mining vs. Dairy Farm International | Atalaya Mining vs. European Metals Holdings | Atalaya Mining vs. Ecofin Global Utilities |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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