Correlation Between Atok Big and Nickel Asia

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

By analyzing existing cross correlation between Atok Big Wedge and Nickel Asia Corp, you can compare the effects of market volatilities on Atok Big and Nickel Asia 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 Atok Big with a short position of Nickel Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atok Big and Nickel Asia.

Diversification Opportunities for Atok Big and Nickel Asia

0.32

Correlation Coefficient

Atok Big  Nickel Asia

Weak diversification

The 3 months correlation between Atok and Nickel is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Atok Big Wedge and Nickel Asia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Asia Corp and Atok Big 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 Atok Big Wedge are associated (or correlated) with Nickel Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Asia Corp has no effect on the direction of Atok Big i.e., Atok Big and Nickel Asia go up and down completely randomly.

Pair Corralation between Atok Big and Nickel Asia

Assuming the 90 days trading horizon Atok Big Wedge is expected to generate 3.4 times more return on investment than Nickel Asia. However, Atok Big is 3.4 times more volatile than Nickel Asia Corp. It trades about 0.02 of its potential returns per unit of risk. Nickel Asia Corp is currently generating about -0.05 per unit of risk. If you would invest  755.00  in Atok Big Wedge on September 24, 2024 and sell it today you would lose (282.00) from holding Atok Big Wedge or give up 37.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	75.05%
Values	Daily Returns

Atok Big Wedge  vs.  Nickel Asia Corp

Atok Big Wedge

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atok Big Wedge are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Atok Big exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nickel Asia Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nickel Asia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Atok Big and Nickel Asia

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

The idea behind Atok Big Wedge and Nickel Asia Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.