Correlation Between Atalaya Mining and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Atalaya Mining and Eastman Chemical 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 Atalaya Mining and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atalaya Mining and Eastman Chemical Co, you can compare the effects of market volatilities on Atalaya Mining and Eastman Chemical 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 Atalaya Mining with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and Eastman Chemical.
Diversification Opportunities for Atalaya Mining and Eastman Chemical
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Atalaya and Eastman is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Atalaya 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 Atalaya Mining are associated (or correlated) with Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Eastman Chemical go up and down completely randomly.
Pair Corralation between Atalaya Mining and Eastman Chemical
Assuming the 90 days trading horizon Atalaya Mining is expected to generate 1.14 times more return on investment than Eastman Chemical. However, Atalaya Mining is 1.14 times more volatile than Eastman Chemical Co. It trades about 0.12 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.03 per unit of risk. If you would invest 35,000 in Atalaya Mining on October 25, 2024 and sell it today you would earn a total of 1,400 from holding Atalaya Mining or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Atalaya Mining vs. Eastman Chemical Co
Performance |
| Timeline |
| Atalaya Mining |
| Eastman Chemical |
Atalaya Mining and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atalaya Mining and Eastman Chemical
The main advantage of trading using opposite Atalaya Mining and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atalaya Mining position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| Atalaya Mining vs. Monks Investment Trust | Atalaya Mining vs. Mineral Financial Investments | Atalaya Mining vs. Zoom Video Communications | Atalaya Mining vs. Herald Investment Trust |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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