Correlation Between Atalaya Mining and Europa Metals
Can any of the company-specific risk be diversified away by investing in both Atalaya Mining and Europa 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 Europa 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 Europa Metals, you can compare the effects of market volatilities on Atalaya Mining and Europa 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 Europa Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and Europa Metals.
Diversification Opportunities for Atalaya Mining and Europa Metals
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atalaya and Europa is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Europa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europa 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 Europa Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europa Metals has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Europa Metals go up and down completely randomly.
Pair Corralation between Atalaya Mining and Europa Metals
Assuming the 90 days trading horizon Atalaya Mining is expected to under-perform the Europa Metals. But the stock apears to be less risky and, when comparing its historical volatility, Atalaya Mining is 1.91 times less risky than Europa Metals. The stock trades about -0.05 of its potential returns per unit of risk. The Europa Metals is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Europa Metals on August 30, 2024 and sell it today you would earn a total of 85.00 from holding Europa Metals or generate 73.91% 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. Europa Metals
Performance |
| Timeline |
| Atalaya Mining |
| Europa Metals |
Atalaya Mining and Europa Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atalaya Mining and Europa Metals
The main advantage of trading using opposite Atalaya Mining and Europa Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atalaya Mining position performs unexpectedly, Europa 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 Europa Metals will offset losses from the drop in Europa Metals' 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 |
| Europa Metals vs. Givaudan SA | Europa Metals vs. Antofagasta PLC | Europa Metals vs. Centamin PLC | Europa Metals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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