Correlation Between Atalaya Mining and Hardide PLC

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

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

Diversification Opportunities for Atalaya Mining and Hardide PLC

0.76

Correlation Coefficient

Atalaya Mining  Hardide PLC

Poor diversification

The 3 months correlation between Atalaya and Hardide is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Atalaya Mining and Hardide PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hardide PLC 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 Hardide PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hardide PLC has no effect on the direction of Atalaya Mining i.e., Atalaya Mining and Hardide PLC go up and down completely randomly.

Pair Corralation between Atalaya Mining and Hardide PLC

Assuming the 90 days trading horizon Atalaya Mining is expected to generate 253.88 times less return on investment than Hardide PLC. But when comparing it to its historical volatility, Atalaya Mining is 1.46 times less risky than Hardide PLC. It trades about 0.0 of its potential returns per unit of risk. Hardide PLC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  435.00  in Hardide PLC on September 19, 2024 and sell it today you would earn a total of  40.00  from holding Hardide PLC or generate 9.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Atalaya Mining  vs.  Hardide PLC

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.

Hardide PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hardide PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Atalaya Mining and Hardide PLC

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

The idea behind Atalaya Mining and Hardide PLC 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.