Correlation Between IShares National and Alpha Metallurgical
Can any of the company-specific risk be diversified away by investing in both IShares National and Alpha Metallurgical 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 IShares National and Alpha Metallurgical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares National Muni and Alpha Metallurgical Resources, you can compare the effects of market volatilities on IShares National and Alpha Metallurgical 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 IShares National with a short position of Alpha Metallurgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares National and Alpha Metallurgical.
Diversification Opportunities for IShares National and Alpha Metallurgical
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and Alpha is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding iShares National Muni and Alpha Metallurgical Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Metallurgical and IShares National 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 iShares National Muni are associated (or correlated) with Alpha Metallurgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Metallurgical has no effect on the direction of IShares National i.e., IShares National and Alpha Metallurgical go up and down completely randomly.
Pair Corralation between IShares National and Alpha Metallurgical
Considering the 90-day investment horizon IShares National is expected to generate 10.48 times less return on investment than Alpha Metallurgical. But when comparing it to its historical volatility, iShares National Muni is 11.7 times less risky than Alpha Metallurgical. It trades about 0.05 of its potential returns per unit of risk. Alpha Metallurgical Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,433 in Alpha Metallurgical Resources on September 3, 2024 and sell it today you would earn a total of 9,814 from holding Alpha Metallurgical Resources or generate 68.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares National Muni vs. Alpha Metallurgical Resources
Performance |
| Timeline |
| iShares National Muni |
| Alpha Metallurgical |
IShares National and Alpha Metallurgical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares National and Alpha Metallurgical
The main advantage of trading using opposite IShares National and Alpha Metallurgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares National position performs unexpectedly, Alpha Metallurgical 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 Alpha Metallurgical will offset losses from the drop in Alpha Metallurgical's long position.| IShares National vs. iShares JP Morgan | IShares National vs. iShares iBoxx Investment | IShares National vs. SPDR Nuveen Bloomberg | IShares National vs. VanEck High Yield |
| Alpha Metallurgical vs. Warrior Met Coal | Alpha Metallurgical vs. Ramaco Resources | Alpha Metallurgical vs. SunCoke Energy | Alpha Metallurgical vs. American Resources Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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