Correlation Between Tyson Foods and Atalaya Mining

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

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

Diversification Opportunities for Tyson Foods and Atalaya Mining

-0.51

Correlation Coefficient

Tyson Foods  Atalaya Mining

Excellent diversification

The 3 months correlation between Tyson and Atalaya is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods Cl and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining and Tyson Foods 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 Tyson Foods Cl 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 Tyson Foods i.e., Tyson Foods and Atalaya Mining go up and down completely randomly.

Pair Corralation between Tyson Foods and Atalaya Mining

Assuming the 90 days trading horizon Tyson Foods is expected to generate 2.48 times less return on investment than Atalaya Mining. But when comparing it to its historical volatility, Tyson Foods Cl is 1.68 times less risky than Atalaya Mining. It trades about 0.02 of its potential returns per unit of risk. Atalaya Mining is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  32,371  in Atalaya Mining on October 9, 2024 and sell it today you would earn a total of  4,629  from holding Atalaya Mining or generate 14.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Tyson Foods Cl  vs.  Atalaya Mining

Tyson Foods Cl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tyson Foods Cl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tyson Foods is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Atalaya Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atalaya Mining has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Tyson Foods and Atalaya Mining

The main advantage of trading using opposite Tyson Foods and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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 Tyson Foods Cl 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..