Correlation Between Atco Mining and Aldebaran Resources
Can any of the company-specific risk be diversified away by investing in both Atco Mining and Aldebaran Resources 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 Mining and Aldebaran Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atco Mining and Aldebaran Resources, you can compare the effects of market volatilities on Atco Mining and Aldebaran Resources 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 Mining with a short position of Aldebaran Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atco Mining and Aldebaran Resources.
Diversification Opportunities for Atco Mining and Aldebaran Resources
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atco and Aldebaran is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Atco Mining and Aldebaran Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldebaran Resources and Atco Mining 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 Mining are associated (or correlated) with Aldebaran Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldebaran Resources has no effect on the direction of Atco Mining i.e., Atco Mining and Aldebaran Resources go up and down completely randomly.
Pair Corralation between Atco Mining and Aldebaran Resources
Assuming the 90 days horizon Atco Mining is expected to generate 2.66 times more return on investment than Aldebaran Resources. However, Atco Mining is 2.66 times more volatile than Aldebaran Resources. It trades about 0.13 of its potential returns per unit of risk. Aldebaran Resources is currently generating about 0.22 per unit of risk. If you would invest 1.07 in Atco Mining on September 1, 2024 and sell it today you would earn a total of 0.25 from holding Atco Mining or generate 23.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Atco Mining vs. Aldebaran Resources
Performance |
| Timeline |
| Atco Mining |
| Aldebaran Resources |
Atco Mining and Aldebaran Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atco Mining and Aldebaran Resources
The main advantage of trading using opposite Atco Mining and Aldebaran Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atco Mining position performs unexpectedly, Aldebaran Resources 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 Aldebaran Resources will offset losses from the drop in Aldebaran Resources' long position.| Atco Mining vs. Legacy Education | Atco Mining vs. Apple Inc | Atco Mining vs. NVIDIA | Atco Mining vs. Microsoft |
| Aldebaran Resources vs. Huntsman Exploration | Aldebaran Resources vs. Aurelia Metals Limited | Aldebaran Resources vs. Adriatic Metals PLC | Aldebaran Resources vs. American Helium |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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