Correlation Between Alternative Investment and Metals Acquisition
Can any of the company-specific risk be diversified away by investing in both Alternative Investment and Metals Acquisition 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 Alternative Investment and Metals Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Investment Trust and Metals Acquisition Limited, you can compare the effects of market volatilities on Alternative Investment and Metals Acquisition 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 Alternative Investment with a short position of Metals Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Investment and Metals Acquisition.
Diversification Opportunities for Alternative Investment and Metals Acquisition
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alternative and Metals is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment Trust and Metals Acquisition Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Acquisition and Alternative Investment 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 Alternative Investment Trust are associated (or correlated) with Metals Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Acquisition has no effect on the direction of Alternative Investment i.e., Alternative Investment and Metals Acquisition go up and down completely randomly.
Pair Corralation between Alternative Investment and Metals Acquisition
Assuming the 90 days trading horizon Alternative Investment Trust is expected to generate 0.65 times more return on investment than Metals Acquisition. However, Alternative Investment Trust is 1.54 times less risky than Metals Acquisition. It trades about 0.03 of its potential returns per unit of risk. Metals Acquisition Limited is currently generating about -0.01 per unit of risk. If you would invest 137.00 in Alternative Investment Trust on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Alternative Investment Trust or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alternative Investment Trust vs. Metals Acquisition Limited
Performance |
| Timeline |
| Alternative Investment |
| Metals Acquisition |
Alternative Investment and Metals Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Investment and Metals Acquisition
The main advantage of trading using opposite Alternative Investment and Metals Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Investment position performs unexpectedly, Metals Acquisition 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 Metals Acquisition will offset losses from the drop in Metals Acquisition's long position.| Alternative Investment vs. Audio Pixels Holdings | Alternative Investment vs. Iodm | Alternative Investment vs. TTG Fintech | Alternative Investment vs. Mantle Minerals Limited |
| Metals Acquisition vs. EROAD | Metals Acquisition vs. Actinogen Medical | Metals Acquisition vs. Kip McGrath Education | Metals Acquisition vs. Strickland Metals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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