Correlation Between Alliance Data and Anglesey Mining
Can any of the company-specific risk be diversified away by investing in both Alliance Data and Anglesey 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 Alliance Data and Anglesey Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Data Systems and Anglesey Mining, you can compare the effects of market volatilities on Alliance Data and Anglesey 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 Alliance Data with a short position of Anglesey Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Data and Anglesey Mining.
Diversification Opportunities for Alliance Data and Anglesey Mining
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliance and Anglesey is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Data Systems and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining and Alliance Data 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 Alliance Data Systems are associated (or correlated) with Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of Alliance Data i.e., Alliance Data and Anglesey Mining go up and down completely randomly.
Pair Corralation between Alliance Data and Anglesey Mining
Assuming the 90 days trading horizon Alliance Data Systems is expected to under-perform the Anglesey Mining. But the stock apears to be less risky and, when comparing its historical volatility, Alliance Data Systems is 2.05 times less risky than Anglesey Mining. The stock trades about -0.32 of its potential returns per unit of risk. The Anglesey Mining is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Anglesey Mining on December 1, 2024 and sell it today you would earn a total of 22.00 from holding Anglesey Mining or generate 32.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alliance Data Systems vs. Anglesey Mining
Performance |
| Timeline |
| Alliance Data Systems |
| Anglesey Mining |
Alliance Data and Anglesey Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Data and Anglesey Mining
The main advantage of trading using opposite Alliance Data and Anglesey Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Data position performs unexpectedly, Anglesey 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 Anglesey Mining will offset losses from the drop in Anglesey Mining's long position.| Alliance Data vs. Zinc Media Group | Alliance Data vs. Eastman Chemical Co | Alliance Data vs. Catalyst Media Group | Alliance Data vs. Games Workshop Group |
| Anglesey Mining vs. Bisichi Mining PLC | Anglesey Mining vs. Coeur Mining | Anglesey Mining vs. Dolly Varden Silver | Anglesey Mining vs. AMG Advanced Metallurgical |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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