Correlation Between Global Energy and Atico Mining
Can any of the company-specific risk be diversified away by investing in both Global Energy and Atico Mining 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 Global Energy and Atico Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Energy Metals and Atico Mining, you can compare the effects of market volatilities on Global Energy and Atico Mining 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 Global Energy with a short position of Atico Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Energy and Atico Mining.
Diversification Opportunities for Global Energy and Atico Mining
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Atico is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Global Energy Metals and Atico Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atico Mining and Global Energy 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 Global Energy Metals are associated (or correlated) with Atico Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atico Mining has no effect on the direction of Global Energy i.e., Global Energy and Atico Mining go up and down completely randomly.
Pair Corralation between Global Energy and Atico Mining
Assuming the 90 days horizon Global Energy is expected to generate 1.44 times less return on investment than Atico Mining. In addition to that, Global Energy is 1.36 times more volatile than Atico Mining. It trades about 0.01 of its total potential returns per unit of risk. Atico Mining is currently generating about 0.01 per unit of volatility. If you would invest 18.00 in Atico Mining on September 3, 2024 and sell it today you would lose (8.00) from holding Atico Mining or give up 44.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Global Energy Metals vs. Atico Mining
Performance |
| Timeline |
| Global Energy Metals |
| Atico Mining |
Global Energy and Atico Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Energy and Atico Mining
The main advantage of trading using opposite Global Energy and Atico Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Energy position performs unexpectedly, Atico Mining 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 Atico Mining will offset losses from the drop in Atico Mining's long position.| Global Energy vs. Golden Goliath Resources | Global Energy vs. Fireweed Zinc | Global Energy vs. Monitor Ventures | Global Energy vs. Lithium Australia NL |
| Atico Mining vs. Edison Cobalt Corp | Atico Mining vs. Champion Bear Resources | Atico Mining vs. Avarone Metals | Atico Mining vs. Adriatic Metals 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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