Correlation Between National Atomic and GoldMining

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

By analyzing existing cross correlation between National Atomic Co and GoldMining, you can compare the effects of market volatilities on National Atomic and GoldMining 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 National Atomic with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Atomic and GoldMining.

Diversification Opportunities for National Atomic and GoldMining

0.5

Correlation Coefficient

National Atomic  GoldMining

Very weak diversification

The 3 months correlation between National and GoldMining is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding National Atomic Co and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and National Atomic 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 National Atomic Co are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of National Atomic i.e., National Atomic and GoldMining go up and down completely randomly.

Pair Corralation between National Atomic and GoldMining

Assuming the 90 days trading horizon National Atomic Co is expected to generate 0.58 times more return on investment than GoldMining. However, National Atomic Co is 1.72 times less risky than GoldMining. It trades about 0.05 of its potential returns per unit of risk. GoldMining is currently generating about -0.06 per unit of risk. If you would invest  3,650  in National Atomic Co on October 8, 2024 and sell it today you would earn a total of  145.00  from holding National Atomic Co or generate 3.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	70.97%
Values	Daily Returns

National Atomic Co  vs.  GoldMining

National Atomic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Atomic Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, National Atomic is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

GoldMining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoldMining 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.

Pair Trading with National Atomic and GoldMining

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

The idea behind National Atomic Co and GoldMining 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.