Correlation Between Atalaya Mining and Eastman Chemical

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

By analyzing existing cross correlation between Atalaya Mining and Eastman Chemical Co, you can compare the effects of market volatilities on Atalaya Mining and Eastman Chemical 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 Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atalaya Mining and Eastman Chemical.

Diversification Opportunities for Atalaya Mining and Eastman Chemical

0.54

Correlation Coefficient

Atalaya Mining  Eastman Chemical

Very weak diversification

The 3 months correlation between Atalaya and Eastman is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical 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 Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Eastman Chemical go up and down completely randomly.

Pair Corralation between Atalaya Mining and Eastman Chemical

Assuming the 90 days trading horizon Atalaya Mining is expected to generate 1.63 times more return on investment than Eastman Chemical. However, Atalaya Mining is 1.63 times more volatile than Eastman Chemical Co. It trades about -0.03 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about -0.25 per unit of risk. If you would invest  39,000  in Atalaya Mining on October 9, 2024 and sell it today you would lose (2,000) from holding Atalaya Mining or give up 5.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Atalaya Mining  vs.  Eastman Chemical Co

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.

Eastman Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Atalaya Mining and Eastman Chemical

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

The idea behind Atalaya Mining and Eastman Chemical Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.