Correlation Between Atalaya Mining and Rheinmetall
Can any of the company-specific risk be diversified away by investing in both Atalaya Mining and Rheinmetall 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 Rheinmetall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atalaya Mining and Rheinmetall AG, you can compare the effects of market volatilities on Atalaya Mining and Rheinmetall 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 Rheinmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and Rheinmetall.
Diversification Opportunities for Atalaya Mining and Rheinmetall
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atalaya and Rheinmetall is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Rheinmetall AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rheinmetall AG 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 Rheinmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rheinmetall AG has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Rheinmetall go up and down completely randomly.
Pair Corralation between Atalaya Mining and Rheinmetall
Assuming the 90 days trading horizon Atalaya Mining is expected to generate 1.96 times less return on investment than Rheinmetall. But when comparing it to its historical volatility, Atalaya Mining is 1.0 times less risky than Rheinmetall. It trades about 0.05 of its potential returns per unit of risk. Rheinmetall AG is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 62,810 in Rheinmetall AG on October 13, 2024 and sell it today you would earn a total of 2,230 from holding Rheinmetall AG or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atalaya Mining vs. Rheinmetall AG
Performance |
| Timeline |
| Atalaya Mining |
| Rheinmetall AG |
Atalaya Mining and Rheinmetall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atalaya Mining and Rheinmetall
The main advantage of trading using opposite Atalaya Mining and Rheinmetall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atalaya Mining position performs unexpectedly, Rheinmetall 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 Rheinmetall will offset losses from the drop in Rheinmetall's long position.| Atalaya Mining vs. Antofagasta PLC | Atalaya Mining vs. Central Asia Metals | Atalaya Mining vs. Anglo Asian Mining | Atalaya Mining vs. Metals Exploration Plc |
| Rheinmetall vs. Blackrock World Mining | Rheinmetall vs. Intermediate Capital Group | Rheinmetall vs. Atalaya Mining | Rheinmetall vs. AcadeMedia AB |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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