Correlation Between Golden Metal and Atalaya Mining
Can any of the company-specific risk be diversified away by investing in both Golden Metal and Atalaya 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 Golden Metal and Atalaya Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Metal Resources and Atalaya Mining, you can compare the effects of market volatilities on Golden Metal and Atalaya 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 Golden Metal with a short position of Atalaya Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Atalaya Mining.
Diversification Opportunities for Golden Metal and Atalaya Mining
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and Atalaya is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining and Golden Metal 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 Golden Metal Resources are associated (or correlated) with Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Golden Metal i.e., Golden Metal and Atalaya Mining go up and down completely randomly.
Pair Corralation between Golden Metal and Atalaya Mining
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 1.09 times more return on investment than Atalaya Mining. However, Golden Metal is 1.09 times more volatile than Atalaya Mining. It trades about 0.12 of its potential returns per unit of risk. Atalaya Mining is currently generating about 0.12 per unit of risk. If you would invest 3,000 in Golden Metal Resources on October 11, 2024 and sell it today you would earn a total of 150.00 from holding Golden Metal Resources or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Atalaya Mining
Performance |
| Timeline |
| Golden Metal Resources |
| Atalaya Mining |
Golden Metal and Atalaya Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Atalaya Mining
The main advantage of trading using opposite Golden Metal and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal position performs unexpectedly, Atalaya 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 Atalaya Mining will offset losses from the drop in Atalaya Mining's long position.| Golden Metal vs. Automatic Data Processing | Golden Metal vs. Alliance Data Systems | Golden Metal vs. Aeorema Communications Plc | Golden Metal vs. Spirent Communications plc |
| Atalaya Mining vs. Wheaton Precious Metals | Atalaya Mining vs. Hochschild Mining plc | Atalaya Mining vs. Coeur Mining | Atalaya Mining vs. Golden Metal Resources |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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