Correlation Between Nickel Asia and Atok Big

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

By analyzing existing cross correlation between Nickel Asia Corp and Atok Big Wedge, you can compare the effects of market volatilities on Nickel Asia and Atok Big 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 Nickel Asia with a short position of Atok Big. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Asia and Atok Big.

Diversification Opportunities for Nickel Asia and Atok Big

0.51

Correlation Coefficient

Nickel Asia  Atok Big

Very weak diversification

The 3 months correlation between Nickel and Atok is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Asia Corp and Atok Big Wedge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atok Big Wedge and Nickel Asia 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 Nickel Asia Corp are associated (or correlated) with Atok Big. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atok Big Wedge has no effect on the direction of Nickel Asia i.e., Nickel Asia and Atok Big go up and down completely randomly.

Pair Corralation between Nickel Asia and Atok Big

Assuming the 90 days trading horizon Nickel Asia Corp is expected to under-perform the Atok Big. But the stock apears to be less risky and, when comparing its historical volatility, Nickel Asia Corp is 2.33 times less risky than Atok Big. The stock trades about -0.03 of its potential returns per unit of risk. The Atok Big Wedge is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  426.00  in Atok Big Wedge on September 14, 2024 and sell it today you would earn a total of  43.00  from holding Atok Big Wedge or generate 10.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	61.9%
Values	Daily Returns

Nickel Asia Corp  vs.  Atok Big Wedge

Nickel Asia Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nickel Asia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nickel Asia is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Atok Big Wedge

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atok Big Wedge are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Atok Big exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nickel Asia and Atok Big

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

The idea behind Nickel Asia Corp and Atok Big Wedge 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.

Check out your portfolio center.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.