Correlation Between NYSE Composite and Alpha Metallurgical
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Alpha Metallurgical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Alpha Metallurgical Resources, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Alpha Metallurgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Alpha Metallurgical.
Diversification Opportunities for NYSE Composite and Alpha Metallurgical
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Alpha is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Alpha Metallurgical Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Metallurgical 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 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 NYSE Composite i.e., NYSE Composite and Alpha Metallurgical go up and down completely randomly.
Pair Corralation between NYSE Composite and Alpha Metallurgical
Assuming the 90 days trading horizon NYSE Composite is expected to generate 12.02 times less return on investment than Alpha Metallurgical. But when comparing it to its historical volatility, NYSE Composite is 4.03 times less risky than Alpha Metallurgical. It trades about 0.13 of its potential returns per unit of risk. Alpha Metallurgical Resources is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 19,842 in Alpha Metallurgical Resources on August 24, 2024 and sell it today you would earn a total of 4,994 from holding Alpha Metallurgical Resources or generate 25.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Alpha Metallurgical Resources
Performance |
| Timeline |
NYSE Composite and Alpha Metallurgical Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Alpha Metallurgical Resources
Pair trading matchups for Alpha Metallurgical
Pair Trading with NYSE Composite and Alpha Metallurgical
The main advantage of trading using opposite NYSE Composite and Alpha Metallurgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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