Correlation Between Atalaya Mining and Central Asia
Can any of the company-specific risk be diversified away by investing in both Atalaya Mining and Central Asia 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 Central Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atalaya Mining and Central Asia Metals, you can compare the effects of market volatilities on Atalaya Mining and Central Asia 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 Central Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and Central Asia.
Diversification Opportunities for Atalaya Mining and Central Asia
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atalaya and Central is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Central Asia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Asia Metals 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 Central Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Asia Metals has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Central Asia go up and down completely randomly.
Pair Corralation between Atalaya Mining and Central Asia
Assuming the 90 days trading horizon Atalaya Mining is expected to generate 1.59 times more return on investment than Central Asia. However, Atalaya Mining is 1.59 times more volatile than Central Asia Metals. It trades about -0.16 of its potential returns per unit of risk. Central Asia Metals is currently generating about -0.32 per unit of risk. If you would invest 40,600 in Atalaya Mining on August 28, 2024 and sell it today you would lose (5,600) from holding Atalaya Mining or give up 13.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atalaya Mining vs. Central Asia Metals
Performance |
| Timeline |
| Atalaya Mining |
| Central Asia Metals |
Atalaya Mining and Central Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atalaya Mining and Central Asia
The main advantage of trading using opposite Atalaya Mining and Central Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atalaya Mining position performs unexpectedly, Central Asia 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 Central Asia will offset losses from the drop in Central Asia's long position.| Atalaya Mining vs. European Metals Holdings | Atalaya Mining vs. Anglesey Mining | Atalaya Mining vs. Arrow Electronics | Atalaya Mining vs. Jacquet Metal Service |
| Central Asia vs. Givaudan SA | Central Asia vs. Antofagasta PLC | Central Asia vs. Atalaya Mining | Central Asia vs. Amaroq Minerals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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