Correlation Between International Business and Atalaya Mining

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

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

Diversification Opportunities for International Business and Atalaya Mining

0.49

Correlation Coefficient

International Business  Atalaya Mining

Very weak diversification

The 3 months correlation between International and Atalaya is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining and International Business 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 International Business Machines 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 International Business i.e., International Business and Atalaya Mining go up and down completely randomly.

Pair Corralation between International Business and Atalaya Mining

If you would invest  11,895  in International Business Machines on August 11, 2024 and sell it today you would earn a total of  0.00  from holding International Business Machines or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.91%
Values	Daily Returns

International Business Machine  vs.  Atalaya Mining

International Business

Risk-Adjusted Performance

0 of 100

Very Weak

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

Atalaya Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atalaya Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Atalaya Mining may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with International Business and Atalaya Mining

The main advantage of trading using opposite International Business and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business 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 International Business Machines 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 CEOs Directory module to screen CEOs from public companies around the world.