Correlation Between Atalaya Mining and First Tin
Can any of the company-specific risk be diversified away by investing in both Atalaya Mining and First Tin 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 First Tin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atalaya Mining and First Tin PLC, you can compare the effects of market volatilities on Atalaya Mining and First Tin 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 First Tin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and First Tin.
Diversification Opportunities for Atalaya Mining and First Tin
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atalaya and First is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and First Tin PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Tin PLC 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 First Tin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Tin PLC has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and First Tin go up and down completely randomly.
Pair Corralation between Atalaya Mining and First Tin
Assuming the 90 days trading horizon Atalaya Mining is expected to generate 0.88 times more return on investment than First Tin. However, Atalaya Mining is 1.13 times less risky than First Tin. It trades about -0.09 of its potential returns per unit of risk. First Tin PLC is currently generating about -0.23 per unit of risk. If you would invest 37,400 in Atalaya Mining on August 30, 2024 and sell it today you would lose (2,000) from holding Atalaya Mining or give up 5.35% 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. First Tin PLC
Performance |
| Timeline |
| Atalaya Mining |
| First Tin PLC |
Atalaya Mining and First Tin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atalaya Mining and First Tin
The main advantage of trading using opposite Atalaya Mining and First Tin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atalaya Mining position performs unexpectedly, First Tin 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 First Tin will offset losses from the drop in First Tin's long position.| Atalaya Mining vs. JB Hunt Transport | Atalaya Mining vs. Kinnevik Investment AB | Atalaya Mining vs. TR Property Investment | Atalaya Mining vs. Orient Telecoms |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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