Correlation Between ATAC Resources and GMV Minerals

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

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

Diversification Opportunities for ATAC Resources and GMV Minerals

-0.01

Correlation Coefficient

ATAC Resources  GMV Minerals

Good diversification

The 3 months correlation between ATAC and GMV is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ATAC Resources and GMV Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMV Minerals and ATAC Resources 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 ATAC Resources are associated (or correlated) with GMV Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMV Minerals has no effect on the direction of ATAC Resources i.e., ATAC Resources and GMV Minerals go up and down completely randomly.

Pair Corralation between ATAC Resources and GMV Minerals

If you would invest  8.98  in GMV Minerals on September 15, 2024 and sell it today you would lose (0.16) from holding GMV Minerals or give up 1.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

ATAC Resources  vs.  GMV Minerals

ATAC Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATAC Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, ATAC Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GMV Minerals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GMV Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, GMV Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATAC Resources and GMV Minerals

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

The idea behind ATAC Resources and GMV Minerals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.