Correlation Between NiHAO Mineral and Atok Big
Can any of the company-specific risk be diversified away by investing in both NiHAO Mineral and Atok Big 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 NiHAO Mineral and Atok Big into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiHAO Mineral Resources and Atok Big Wedge, you can compare the effects of market volatilities on NiHAO Mineral and Atok Big 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 NiHAO Mineral with a short position of Atok Big. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiHAO Mineral and Atok Big.
Diversification Opportunities for NiHAO Mineral and Atok Big
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NiHAO and Atok is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding NiHAO Mineral Resources and Atok Big Wedge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atok Big Wedge and NiHAO Mineral 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 NiHAO Mineral Resources are associated (or correlated) with Atok Big. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atok Big Wedge has no effect on the direction of NiHAO Mineral i.e., NiHAO Mineral and Atok Big go up and down completely randomly.
Pair Corralation between NiHAO Mineral and Atok Big
Assuming the 90 days trading horizon NiHAO Mineral is expected to generate 1.33 times less return on investment than Atok Big. In addition to that, NiHAO Mineral is 1.02 times more volatile than Atok Big Wedge. It trades about 0.02 of its total potential returns per unit of risk. Atok Big Wedge is currently generating about 0.03 per unit of volatility. If you would invest 614.00 in Atok Big Wedge on September 19, 2024 and sell it today you would lose (134.00) from holding Atok Big Wedge or give up 21.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.7% |
| Values | Daily Returns |
NiHAO Mineral Resources vs. Atok Big Wedge
Performance |
| Timeline |
| NiHAO Mineral Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Atok Big Wedge |
NiHAO Mineral and Atok Big Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiHAO Mineral and Atok Big
The main advantage of trading using opposite NiHAO Mineral and Atok Big positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiHAO Mineral position performs unexpectedly, Atok Big 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 Atok Big will offset losses from the drop in Atok Big's long position.| NiHAO Mineral vs. Atok Big Wedge | NiHAO Mineral vs. Philex Mining Corp | NiHAO Mineral vs. Atlas Consolidated Mining | NiHAO Mineral vs. Lepanto Consolidated Mining |
| Atok Big vs. Philex Mining Corp | Atok Big vs. Atlas Consolidated Mining | Atok Big vs. Lepanto Consolidated 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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