Correlation Between Lindsell Train and Atalaya Mining

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

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

Diversification Opportunities for Lindsell Train and Atalaya Mining

0.46

Correlation Coefficient

Lindsell Train  Atalaya Mining

Very weak diversification

The 3 months correlation between Lindsell and Atalaya is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining and Lindsell Train 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 Lindsell Train Investment are associated (or correlated) with Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Lindsell Train i.e., Lindsell Train and Atalaya Mining go up and down completely randomly.

Pair Corralation between Lindsell Train and Atalaya Mining

Assuming the 90 days trading horizon Lindsell Train Investment is expected to generate 0.7 times more return on investment than Atalaya Mining. However, Lindsell Train Investment is 1.42 times less risky than Atalaya Mining. It trades about 0.22 of its potential returns per unit of risk. Atalaya Mining is currently generating about 0.03 per unit of risk. If you would invest  72,600  in Lindsell Train Investment on December 4, 2024 and sell it today you would earn a total of  15,000  from holding Lindsell Train Investment or generate 20.66% return on investment over 90 days.

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

Lindsell Train Investment  vs.  Atalaya Mining

Lindsell Train Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lindsell Train Investment are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Lindsell Train exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Lindsell Train and Atalaya Mining

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

The idea behind Lindsell Train Investment and Atalaya 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.