Correlation Between SPASX 200 and Alto Metals
Can any of the company-specific risk be diversified away by investing in both SPASX 200 and Alto 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 SPASX 200 and Alto Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX 200 VIX and Alto Metals, you can compare the effects of market volatilities on SPASX 200 and Alto 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 SPASX 200 with a short position of Alto Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX 200 and Alto Metals.
Diversification Opportunities for SPASX 200 and Alto Metals
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPASX and Alto is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SPASX 200 VIX and Alto Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alto Metals and SPASX 200 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 SPASX 200 VIX are associated (or correlated) with Alto Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alto Metals has no effect on the direction of SPASX 200 i.e., SPASX 200 and Alto Metals go up and down completely randomly.
Pair Corralation between SPASX 200 and Alto Metals
Assuming the 90 days trading horizon SPASX 200 is expected to generate 1.1 times less return on investment than Alto Metals. In addition to that, SPASX 200 is 1.25 times more volatile than Alto Metals. It trades about 0.02 of its total potential returns per unit of risk. Alto Metals is currently generating about 0.03 per unit of volatility. If you would invest 7.10 in Alto Metals on September 3, 2024 and sell it today you would earn a total of 2.10 from holding Alto Metals or generate 29.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPASX 200 VIX vs. Alto Metals
Performance |
| Timeline |
SPASX 200 and Alto Metals Volatility Contrast
Predicted Return Density |
| Returns |
SPASX 200 VIX
Pair trading matchups for SPASX 200
Alto Metals
Pair trading matchups for Alto Metals
Pair Trading with SPASX 200 and Alto Metals
The main advantage of trading using opposite SPASX 200 and Alto Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX 200 position performs unexpectedly, Alto 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 Alto Metals will offset losses from the drop in Alto Metals' long position.| SPASX 200 vs. TTG Fintech | SPASX 200 vs. Dug Technology | SPASX 200 vs. Energy Technologies Limited | SPASX 200 vs. Ainsworth Game Technology |
| Alto Metals vs. Evolution Mining | Alto Metals vs. Andean Silver Limited | Alto Metals vs. Seven West Media | Alto Metals vs. oOhMedia |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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