Correlation Between GoldMining and National Atomic

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

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

Diversification Opportunities for GoldMining and National Atomic

0.28

Correlation Coefficient

GoldMining  National Atomic

Modest diversification

The 3 months correlation between GoldMining and National is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic and GoldMining 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 GoldMining are associated (or correlated) with National Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of GoldMining i.e., GoldMining and National Atomic go up and down completely randomly.

Pair Corralation between GoldMining and National Atomic

Assuming the 90 days trading horizon GoldMining is expected to under-perform the National Atomic. In addition to that, GoldMining is 1.51 times more volatile than National Atomic Co. It trades about -0.02 of its total potential returns per unit of risk. National Atomic Co is currently generating about 0.1 per unit of volatility. If you would invest  3,635  in National Atomic Co on September 5, 2024 and sell it today you would earn a total of  425.00  from holding National Atomic Co or generate 11.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	67.69%
Values	Daily Returns

GoldMining  vs.  National Atomic Co

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 comparatively stable basic indicators, GoldMining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

National Atomic

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Atomic Co 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, National Atomic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GoldMining and National Atomic

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

The idea behind GoldMining and National Atomic Co 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.