Correlation Between NetMed and Atacama Resources

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

By analyzing existing cross correlation between NetMed Inc and Atacama Resources International, you can compare the effects of market volatilities on NetMed and Atacama Resources 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 NetMed with a short position of Atacama Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetMed and Atacama Resources.

Diversification Opportunities for NetMed and Atacama Resources

0.0

Correlation Coefficient

NetMed  Atacama Resources

Pay attention - limited upside

The 3 months correlation between NetMed and Atacama is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NetMed Inc and Atacama Resources Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacama Resources and NetMed 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 NetMed Inc are associated (or correlated) with Atacama Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacama Resources has no effect on the direction of NetMed i.e., NetMed and Atacama Resources go up and down completely randomly.

Pair Corralation between NetMed and Atacama Resources

If you would invest  0.80  in Atacama Resources International on December 2, 2024 and sell it today you would lose (0.66) from holding Atacama Resources International or give up 82.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NetMed Inc  vs.  Atacama Resources Internationa

NetMed Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days NetMed Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, NetMed is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Atacama Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atacama Resources International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with NetMed and Atacama Resources

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

The idea behind NetMed Inc and Atacama Resources International 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.