Correlation Between Adriatic Metals and ANDRADA MINING

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

By analyzing existing cross correlation between Adriatic Metals Plc and ANDRADA MINING LTD, you can compare the effects of market volatilities on Adriatic Metals and ANDRADA 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 Adriatic Metals with a short position of ANDRADA MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and ANDRADA MINING.

Diversification Opportunities for Adriatic Metals and ANDRADA MINING

-0.58

Correlation Coefficient

Adriatic Metals  ANDRADA MINING

Excellent diversification

The 3 months correlation between Adriatic and ANDRADA is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals Plc and ANDRADA MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANDRADA MINING LTD and Adriatic Metals 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 Adriatic Metals Plc are associated (or correlated) with ANDRADA MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANDRADA MINING LTD has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and ANDRADA MINING go up and down completely randomly.

Pair Corralation between Adriatic Metals and ANDRADA MINING

Assuming the 90 days horizon Adriatic Metals Plc is expected to generate 1.22 times more return on investment than ANDRADA MINING. However, Adriatic Metals is 1.22 times more volatile than ANDRADA MINING LTD. It trades about 0.12 of its potential returns per unit of risk. ANDRADA MINING LTD is currently generating about 0.02 per unit of risk. If you would invest  240.00  in Adriatic Metals Plc on April 21, 2025 and sell it today you would earn a total of  78.00  from holding Adriatic Metals Plc or generate 32.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Adriatic Metals Plc  vs.  ANDRADA MINING LTD

Adriatic Metals Plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adriatic Metals Plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Adriatic Metals reported solid returns over the last few months and may actually be approaching a breakup point.

ANDRADA MINING LTD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ANDRADA MINING LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ANDRADA MINING is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Adriatic Metals and ANDRADA MINING

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

The idea behind Adriatic Metals Plc and ANDRADA MINING LTD 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.