Correlation Between NYSE Composite and Altura Mining
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Altura 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 NYSE Composite and Altura Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Altura Mining Limited, you can compare the effects of market volatilities on NYSE Composite and Altura 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 NYSE Composite with a short position of Altura Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Altura Mining.
Diversification Opportunities for NYSE Composite and Altura Mining
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Altura is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Altura Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Mining Limited and NYSE Composite 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 NYSE Composite are associated (or correlated) with Altura Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Mining Limited has no effect on the direction of NYSE Composite i.e., NYSE Composite and Altura Mining go up and down completely randomly.
Pair Corralation between NYSE Composite and Altura Mining
Assuming the 90 days trading horizon NYSE Composite is expected to generate 235.18 times less return on investment than Altura Mining. But when comparing it to its historical volatility, NYSE Composite is 338.02 times less risky than Altura Mining. It trades about 0.24 of its potential returns per unit of risk. Altura Mining Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Altura Mining Limited on August 28, 2024 and sell it today you would lose (0.48) from holding Altura Mining Limited or give up 48.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Altura Mining Limited
Performance |
| Timeline |
NYSE Composite and Altura Mining Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Altura Mining Limited
Pair trading matchups for Altura Mining
Pair Trading with NYSE Composite and Altura Mining
The main advantage of trading using opposite NYSE Composite and Altura Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Altura 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 Altura Mining will offset losses from the drop in Altura Mining's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Altura Mining vs. Aurelia Metals Limited | Altura Mining vs. Ascendant Resources | Altura Mining vs. Artemis Resources | Altura Mining vs. Azimut Exploration |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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