Correlation Between Atalaya Mining and Indutrade

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

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

Diversification Opportunities for Atalaya Mining and Indutrade

0.56

Correlation Coefficient

Atalaya Mining  Indutrade

Very weak diversification

The 3 months correlation between Atalaya and Indutrade is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB and Atalaya Mining 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 Atalaya Mining are associated (or correlated) with Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Indutrade go up and down completely randomly.

Pair Corralation between Atalaya Mining and Indutrade

Assuming the 90 days trading horizon Atalaya Mining is expected to generate 1.6 times less return on investment than Indutrade. In addition to that, Atalaya Mining is 1.33 times more volatile than Indutrade AB. It trades about 0.1 of its total potential returns per unit of risk. Indutrade AB is currently generating about 0.21 per unit of volatility. If you would invest  26,910  in Indutrade AB on November 20, 2024 and sell it today you would earn a total of  5,450  from holding Indutrade AB or generate 20.25% return on investment over 90 days.

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

Atalaya Mining  vs.  Indutrade AB

Atalaya Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atalaya Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Atalaya Mining may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Indutrade AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Indutrade AB are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Indutrade unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atalaya Mining and Indutrade

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

The idea behind Atalaya Mining and Indutrade AB 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.