Correlation Between Atalaya Mining and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Atalaya Mining and SMA Solar 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 SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atalaya Mining and SMA Solar Technology, you can compare the effects of market volatilities on Atalaya Mining and SMA Solar 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 SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and SMA Solar.
Diversification Opportunities for Atalaya Mining and SMA Solar
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atalaya and SMA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology 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 SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and SMA Solar go up and down completely randomly.
Pair Corralation between Atalaya Mining and SMA Solar
Assuming the 90 days trading horizon Atalaya Mining is expected to generate 0.62 times more return on investment than SMA Solar. However, Atalaya Mining is 1.61 times less risky than SMA Solar. It trades about -0.12 of its potential returns per unit of risk. SMA Solar Technology is currently generating about -0.13 per unit of risk. If you would invest 36,550 in Atalaya Mining on November 2, 2024 and sell it today you would lose (1,850) from holding Atalaya Mining or give up 5.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atalaya Mining vs. SMA Solar Technology
Performance |
| Timeline |
| Atalaya Mining |
| SMA Solar Technology |
Atalaya Mining and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atalaya Mining and SMA Solar
The main advantage of trading using opposite Atalaya Mining and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atalaya Mining position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| Atalaya Mining vs. Berner Kantonalbank AG | Atalaya Mining vs. Commerzbank AG | Atalaya Mining vs. Compal Electronics GDR | Atalaya Mining vs. Naked Wines plc |
| SMA Solar vs. Arrow Electronics | SMA Solar vs. Xeros Technology Group | SMA Solar vs. Take Two Interactive Software | SMA Solar vs. International Biotechnology Trust |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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