Correlation Between Lindsell Train and Atalaya Mining
Can any of the company-specific risk be diversified away by investing in both Lindsell Train 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 Lindsell Train and Atalaya Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindsell Train Investment and Atalaya Mining, you can compare the effects of market volatilities on Lindsell Train 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 Lindsell Train with a short position of Atalaya Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Atalaya Mining.
Diversification Opportunities for Lindsell Train and Atalaya Mining
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lindsell and Atalaya is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining and Lindsell Train 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 Lindsell Train Investment 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 Lindsell Train i.e., Lindsell Train and Atalaya Mining go up and down completely randomly.
Pair Corralation between Lindsell Train and Atalaya Mining
Assuming the 90 days trading horizon Lindsell Train is expected to generate 2.77 times less return on investment than Atalaya Mining. But when comparing it to its historical volatility, Lindsell Train Investment is 1.54 times less risky than Atalaya Mining. It trades about 0.11 of its potential returns per unit of risk. Atalaya Mining is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 33,950 in Atalaya Mining on September 14, 2024 and sell it today you would earn a total of 2,950 from holding Atalaya Mining or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsell Train Investment vs. Atalaya Mining
Performance |
| Timeline |
| Lindsell Train Investment |
| Atalaya Mining |
Lindsell Train and Atalaya Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Atalaya Mining
The main advantage of trading using opposite Lindsell Train and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train 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.| Lindsell Train vs. Catalyst Media Group | Lindsell Train vs. CATLIN GROUP | Lindsell Train vs. Tamburi Investment Partners | Lindsell Train vs. Magnora ASA |
| Atalaya Mining vs. Lindsell Train Investment | Atalaya Mining vs. Empire Metals Limited | Atalaya Mining vs. Wheaton Precious Metals | Atalaya Mining vs. GoldMining |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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