Correlation Between Atalaya Mining and European Metals
Can any of the company-specific risk be diversified away by investing in both Atalaya Mining and European Metals 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 European Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atalaya Mining and European Metals Holdings, you can compare the effects of market volatilities on Atalaya Mining and European Metals 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 European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and European Metals.
Diversification Opportunities for Atalaya Mining and European Metals
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Atalaya and European is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings 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 European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and European Metals go up and down completely randomly.
Pair Corralation between Atalaya Mining and European Metals
Assuming the 90 days trading horizon Atalaya Mining is expected to generate 0.89 times more return on investment than European Metals. However, Atalaya Mining is 1.13 times less risky than European Metals. It trades about -0.09 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.2 per unit of risk. If you would invest 36,800 in Atalaya Mining on August 26, 2024 and sell it today you would lose (1,900) from holding Atalaya Mining or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atalaya Mining vs. European Metals Holdings
Performance |
| Timeline |
| Atalaya Mining |
| European Metals Holdings |
Atalaya Mining and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atalaya Mining and European Metals
The main advantage of trading using opposite Atalaya Mining and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atalaya Mining position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' long position.| Atalaya Mining vs. Sabre Insurance Group | Atalaya Mining vs. Check Point Software | Atalaya Mining vs. Zurich Insurance Group | Atalaya Mining vs. Iron Mountain |
| European Metals vs. G5 Entertainment AB | European Metals vs. Centaur Media | European Metals vs. Atalaya Mining | European Metals vs. Flutter Entertainment PLC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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