Correlation Between Indutrade and Atalaya Mining

Can any of the company-specific risk be diversified away by investing in both Indutrade and Atalaya 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 Indutrade and Atalaya Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indutrade AB and Atalaya Mining, you can compare the effects of market volatilities on Indutrade and Atalaya 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 Indutrade with a short position of Atalaya Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Atalaya Mining.

Diversification Opportunities for Indutrade and Atalaya Mining

0.61

Correlation Coefficient

Indutrade  Atalaya Mining

Poor diversification

The 3 months correlation between Indutrade and Atalaya is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining and Indutrade 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 Indutrade AB are associated (or correlated) with Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Indutrade i.e., Indutrade and Atalaya Mining go up and down completely randomly.

Pair Corralation between Indutrade and Atalaya Mining

Assuming the 90 days trading horizon Indutrade AB is expected to generate 0.76 times more return on investment than Atalaya Mining. However, Indutrade AB is 1.31 times less risky than Atalaya Mining. It trades about 0.11 of its potential returns per unit of risk. Atalaya Mining is currently generating about 0.03 per unit of risk. If you would invest  27,886  in Indutrade AB on November 30, 2024 and sell it today you would earn a total of  2,814  from holding Indutrade AB or generate 10.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Indutrade AB  vs.  Atalaya Mining

Indutrade AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Indutrade AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Indutrade may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Atalaya Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atalaya Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Atalaya Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Indutrade and Atalaya Mining

The main advantage of trading using opposite Indutrade and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Atalaya 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 Atalaya Mining will offset losses from the drop in Atalaya Mining's long position.

The idea behind Indutrade AB and Atalaya Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..