Correlation Between Atalaya Mining and Caledonia Investments
Can any of the company-specific risk be diversified away by investing in both Atalaya Mining and Caledonia Investments 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 Caledonia Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atalaya Mining and Caledonia Investments, you can compare the effects of market volatilities on Atalaya Mining and Caledonia Investments 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 Caledonia Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and Caledonia Investments.
Diversification Opportunities for Atalaya Mining and Caledonia Investments
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atalaya and Caledonia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Caledonia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Investments 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 Caledonia Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Investments has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Caledonia Investments go up and down completely randomly.
Pair Corralation between Atalaya Mining and Caledonia Investments
Assuming the 90 days trading horizon Atalaya Mining is expected to under-perform the Caledonia Investments. In addition to that, Atalaya Mining is 2.2 times more volatile than Caledonia Investments. It trades about -0.04 of its total potential returns per unit of risk. Caledonia Investments is currently generating about 0.18 per unit of volatility. If you would invest 330,981 in Caledonia Investments on October 26, 2024 and sell it today you would earn a total of 35,519 from holding Caledonia Investments or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atalaya Mining vs. Caledonia Investments
Performance |
| Timeline |
| Atalaya Mining |
| Caledonia Investments |
Atalaya Mining and Caledonia Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atalaya Mining and Caledonia Investments
The main advantage of trading using opposite Atalaya Mining and Caledonia Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atalaya Mining position performs unexpectedly, Caledonia Investments 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 Caledonia Investments will offset losses from the drop in Caledonia Investments' long position.| Atalaya Mining vs. Commerzbank AG | Atalaya Mining vs. Discover Financial Services | Atalaya Mining vs. Charter Communications Cl | Atalaya Mining vs. Raymond James Financial |
| Caledonia Investments vs. Berner Kantonalbank AG | Caledonia Investments vs. Lundin Mining Corp | Caledonia Investments vs. AfriTin Mining | Caledonia Investments vs. Atalaya Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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