Correlation Between Atalaya Mining and CAP LEASE

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

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

Diversification Opportunities for Atalaya Mining and CAP LEASE

0.25

Correlation Coefficient

Atalaya Mining  CAP LEASE

Modest diversification

The 3 months correlation between Atalaya and CAP is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION 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 CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and CAP LEASE go up and down completely randomly.

Pair Corralation between Atalaya Mining and CAP LEASE

Assuming the 90 days trading horizon Atalaya Mining is expected to generate 0.72 times more return on investment than CAP LEASE. However, Atalaya Mining is 1.39 times less risky than CAP LEASE. It trades about 0.07 of its potential returns per unit of risk. CAP LEASE AVIATION is currently generating about -0.02 per unit of risk. If you would invest  18,532  in Atalaya Mining on June 18, 2024 and sell it today you would earn a total of  17,568  from holding Atalaya Mining or generate 94.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	80.92%
Values	Daily Returns

Atalaya Mining  vs.  CAP LEASE AVIATION

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.

CAP LEASE AVIATION

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CAP LEASE AVIATION are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, CAP LEASE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atalaya Mining and CAP LEASE

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

The idea behind Atalaya Mining and CAP LEASE AVIATION 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.