Correlation Between Dynacor Gold and Atico Mining

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

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

Diversification Opportunities for Dynacor Gold and Atico Mining

0.38

Correlation Coefficient

Dynacor Gold  Atico Mining

Weak diversification

The 3 months correlation between Dynacor and Atico is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dynacor Gold Mines and Atico Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atico Mining and Dynacor Gold 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 Dynacor Gold Mines are associated (or correlated) with Atico Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atico Mining has no effect on the direction of Dynacor Gold i.e., Dynacor Gold and Atico Mining go up and down completely randomly.

Pair Corralation between Dynacor Gold and Atico Mining

Assuming the 90 days horizon Dynacor Gold Mines is expected to under-perform the Atico Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dynacor Gold Mines is 6.54 times less risky than Atico Mining. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Atico Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Atico Mining on December 29, 2024 and sell it today you would lose (1.80) from holding Atico Mining or give up 25.71% of portfolio value over 90 days.

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

Dynacor Gold Mines  vs.  Atico Mining

Dynacor Gold Mines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynacor Gold Mines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Atico Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atico Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Atico Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dynacor Gold and Atico Mining

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

The idea behind Dynacor Gold Mines and Atico Mining 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.