Correlation Between Alpha Metallurgical and Continental
Can any of the company-specific risk be diversified away by investing in both Alpha Metallurgical and Continental 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 Alpha Metallurgical and Continental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Metallurgical Resources and Caleres, you can compare the effects of market volatilities on Alpha Metallurgical and Continental 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 Alpha Metallurgical with a short position of Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Metallurgical and Continental.
Diversification Opportunities for Alpha Metallurgical and Continental
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alpha and Continental is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Metallurgical Resources and Caleres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental and Alpha Metallurgical 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 Alpha Metallurgical Resources are associated (or correlated) with Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental has no effect on the direction of Alpha Metallurgical i.e., Alpha Metallurgical and Continental go up and down completely randomly.
Pair Corralation between Alpha Metallurgical and Continental
Considering the 90-day investment horizon Alpha Metallurgical Resources is expected to generate 1.11 times more return on investment than Continental. However, Alpha Metallurgical is 1.11 times more volatile than Caleres. It trades about 0.05 of its potential returns per unit of risk. Caleres is currently generating about 0.04 per unit of risk. If you would invest 14,433 in Alpha Metallurgical Resources on September 3, 2024 and sell it today you would earn a total of 9,814 from holding Alpha Metallurgical Resources or generate 68.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Metallurgical Resources vs. Caleres
Performance |
| Timeline |
| Alpha Metallurgical |
| Continental |
Alpha Metallurgical and Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Metallurgical and Continental
The main advantage of trading using opposite Alpha Metallurgical and Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Metallurgical position performs unexpectedly, Continental 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 Continental will offset losses from the drop in Continental's long position.| Alpha Metallurgical vs. Warrior Met Coal | Alpha Metallurgical vs. Ramaco Resources | Alpha Metallurgical vs. SunCoke Energy | Alpha Metallurgical vs. American Resources Corp |
| Continental vs. Vera Bradley | Continental vs. Wolverine World Wide | Continental vs. Rocky Brands | Continental vs. Steven Madden |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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