Correlation Between Atalaya Mining and PPHE Hotel

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

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

Diversification Opportunities for Atalaya Mining and PPHE Hotel

-0.32

Correlation Coefficient

Atalaya Mining  PPHE Hotel

Very good diversification

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

Pair Corralation between Atalaya Mining and PPHE Hotel

Assuming the 90 days trading horizon Atalaya Mining is expected to under-perform the PPHE Hotel. In addition to that, Atalaya Mining is 1.3 times more volatile than PPHE Hotel Group. It trades about -0.07 of its total potential returns per unit of risk. PPHE Hotel Group is currently generating about 0.19 per unit of volatility. If you would invest  118,000  in PPHE Hotel Group on October 7, 2024 and sell it today you would earn a total of  23,500  from holding PPHE Hotel Group or generate 19.92% 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.  PPHE Hotel Group

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

PPHE Hotel Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PPHE Hotel Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, PPHE Hotel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atalaya Mining and PPHE Hotel

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

The idea behind Atalaya Mining and PPHE Hotel Group 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.