Correlation Between Stelar Metals and Atomos
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Atomos 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 Stelar Metals and Atomos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Atomos, you can compare the effects of market volatilities on Stelar Metals and Atomos 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 Stelar Metals with a short position of Atomos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Atomos.
Diversification Opportunities for Stelar Metals and Atomos
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stelar and Atomos is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Atomos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atomos and Stelar Metals 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 Stelar Metals are associated (or correlated) with Atomos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atomos has no effect on the direction of Stelar Metals i.e., Stelar Metals and Atomos go up and down completely randomly.
Pair Corralation between Stelar Metals and Atomos
Assuming the 90 days trading horizon Stelar Metals is expected to generate 0.76 times more return on investment than Atomos. However, Stelar Metals is 1.32 times less risky than Atomos. It trades about -0.03 of its potential returns per unit of risk. Atomos is currently generating about -0.22 per unit of risk. If you would invest 7.60 in Stelar Metals on September 2, 2024 and sell it today you would lose (1.00) from holding Stelar Metals or give up 13.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Atomos
Performance |
| Timeline |
| Stelar Metals |
| Atomos |
Stelar Metals and Atomos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Atomos
The main advantage of trading using opposite Stelar Metals and Atomos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Atomos 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 Atomos will offset losses from the drop in Atomos' long position.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Atomos vs. Audio Pixels Holdings | Atomos vs. Norwest Minerals | Atomos vs. Lindian Resources | Atomos vs. Resource Base |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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