Correlation Between Atalaya Mining and Herald Investment

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

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

Diversification Opportunities for Atalaya Mining and Herald Investment

-0.24

Correlation Coefficient

Atalaya Mining  Herald Investment

Very good diversification

The 3 months correlation between Atalaya and Herald is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Herald Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herald Investment Trust 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 Herald Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herald Investment Trust has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Herald Investment go up and down completely randomly.

Pair Corralation between Atalaya Mining and Herald Investment

Assuming the 90 days trading horizon Atalaya Mining is expected to generate 2.43 times more return on investment than Herald Investment. However, Atalaya Mining is 2.43 times more volatile than Herald Investment Trust. It trades about 0.11 of its potential returns per unit of risk. Herald Investment Trust is currently generating about -0.31 per unit of risk. If you would invest  34,700  in Atalaya Mining on December 1, 2024 and sell it today you would earn a total of  1,800  from holding Atalaya Mining or generate 5.19% return on investment over 90 days.

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

Atalaya Mining  vs.  Herald Investment Trust

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.

Herald Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Herald Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Atalaya Mining and Herald Investment

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

The idea behind Atalaya Mining and Herald Investment Trust 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.