Correlation Between IperionX Limited and Atico Mining

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

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

Diversification Opportunities for IperionX Limited and Atico Mining

-0.52

Correlation Coefficient

IperionX Limited  Atico Mining

Excellent diversification

The 3 months correlation between IperionX and Atico is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding IperionX Limited American and Atico Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atico Mining and IperionX Limited 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 IperionX Limited American are associated (or correlated) with Atico Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atico Mining has no effect on the direction of IperionX Limited i.e., IperionX Limited and Atico Mining go up and down completely randomly.

Pair Corralation between IperionX Limited and Atico Mining

Considering the 90-day investment horizon IperionX Limited American is expected to generate 0.81 times more return on investment than Atico Mining. However, IperionX Limited American is 1.23 times less risky than Atico Mining. It trades about 0.09 of its potential returns per unit of risk. Atico Mining is currently generating about -0.38 per unit of risk. If you would invest  2,626  in IperionX Limited American on September 12, 2024 and sell it today you would earn a total of  178.00  from holding IperionX Limited American or generate 6.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

IperionX Limited American  vs.  Atico Mining

IperionX Limited American

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IperionX Limited American are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, IperionX Limited showed solid returns over the last few months and may actually be approaching a breakup point.

Atico Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atico Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with IperionX Limited and Atico Mining

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

The idea behind IperionX Limited American and Atico 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.