Correlation Between Atalaya Mining and Young Cos
Can any of the company-specific risk be diversified away by investing in both Atalaya Mining and Young Cos 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 Young Cos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atalaya Mining and Young Cos Brewery, you can compare the effects of market volatilities on Atalaya Mining and Young Cos 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 Young Cos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and Young Cos.
Diversification Opportunities for Atalaya Mining and Young Cos
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atalaya and Young is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Young Cos Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Cos Brewery 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 Young Cos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Cos Brewery has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Young Cos go up and down completely randomly.
Pair Corralation between Atalaya Mining and Young Cos
Assuming the 90 days trading horizon Atalaya Mining is expected to under-perform the Young Cos. In addition to that, Atalaya Mining is 1.55 times more volatile than Young Cos Brewery. It trades about -0.09 of its total potential returns per unit of risk. Young Cos Brewery is currently generating about 0.11 per unit of volatility. If you would invest 60,490 in Young Cos Brewery on August 29, 2024 and sell it today you would earn a total of 2,110 from holding Young Cos Brewery or generate 3.49% 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. Young Cos Brewery
Performance |
| Timeline |
| Atalaya Mining |
| Young Cos Brewery |
Atalaya Mining and Young Cos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atalaya Mining and Young Cos
The main advantage of trading using opposite Atalaya Mining and Young Cos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atalaya Mining position performs unexpectedly, Young Cos 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 Young Cos will offset losses from the drop in Young Cos' long position.The idea behind Atalaya Mining and Young Cos Brewery pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Young Cos vs. Ondine Biomedical | Young Cos vs. Europa Metals | Young Cos vs. Lendinvest PLC | Young Cos vs. Neometals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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