Correlation Between Atalaya Mining and Golden Metal

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

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

Diversification Opportunities for Atalaya Mining and Golden Metal

0.15

Correlation Coefficient

Atalaya Mining  Golden Metal

Average diversification

The 3 months correlation between Atalaya and Golden is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources 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 Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Golden Metal go up and down completely randomly.

Pair Corralation between Atalaya Mining and Golden Metal

Assuming the 90 days trading horizon Atalaya Mining is expected to generate 10.75 times less return on investment than Golden Metal. But when comparing it to its historical volatility, Atalaya Mining is 1.5 times less risky than Golden Metal. It trades about 0.03 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,800  in Golden Metal Resources on December 29, 2024 and sell it today you would earn a total of  1,850  from holding Golden Metal Resources or generate 66.07% return on investment over 90 days.

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

Atalaya Mining  vs.  Golden Metal Resources

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.

Golden Metal Resources

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Metal Resources are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Golden Metal unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atalaya Mining and Golden Metal

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

The idea behind Atalaya Mining and Golden Metal Resources 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.