Correlation Between Ironbark Capital and Alto Metals
Can any of the company-specific risk be diversified away by investing in both Ironbark Capital 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 Ironbark Capital and Alto Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ironbark Capital and Alto Metals, you can compare the effects of market volatilities on Ironbark Capital 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 Ironbark Capital with a short position of Alto Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ironbark Capital and Alto Metals.
Diversification Opportunities for Ironbark Capital and Alto Metals
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ironbark and Alto is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital and Alto Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alto Metals and Ironbark Capital 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 Ironbark Capital 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 Ironbark Capital i.e., Ironbark Capital and Alto Metals go up and down completely randomly.
Pair Corralation between Ironbark Capital and Alto Metals
Assuming the 90 days trading horizon Ironbark Capital is expected to generate 135.22 times less return on investment than Alto Metals. But when comparing it to its historical volatility, Ironbark Capital is 3.46 times less risky than Alto Metals. It trades about 0.01 of its potential returns per unit of risk. Alto Metals is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Alto Metals on August 25, 2024 and sell it today you would earn a total of 1.30 from holding Alto Metals or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ironbark Capital vs. Alto Metals
Performance |
| Timeline |
| Ironbark Capital |
| Alto Metals |
Ironbark Capital and Alto Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ironbark Capital and Alto Metals
The main advantage of trading using opposite Ironbark Capital and Alto Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ironbark Capital 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.| Ironbark Capital vs. GQG Partners DRC | Ironbark Capital vs. MFF Capital Investments | Ironbark Capital vs. L1 Long Short | Ironbark Capital vs. BKI Investment |
| Alto Metals vs. Northern Star Resources | Alto Metals vs. Evolution Mining | Alto Metals vs. Aneka Tambang Tbk | Alto Metals vs. De Grey 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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