Correlation Between AMG Advanced and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Antofagasta 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 AMG Advanced and Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Antofagasta PLC, you can compare the effects of market volatilities on AMG Advanced and Antofagasta 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 AMG Advanced with a short position of Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Antofagasta PLC.
Diversification Opportunities for AMG Advanced and Antofagasta PLC
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMG and Antofagasta is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of AMG Advanced i.e., AMG Advanced and Antofagasta PLC go up and down completely randomly.
Pair Corralation between AMG Advanced and Antofagasta PLC
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to generate 1.1 times more return on investment than Antofagasta PLC. However, AMG Advanced is 1.1 times more volatile than Antofagasta PLC. It trades about 0.04 of its potential returns per unit of risk. Antofagasta PLC is currently generating about 0.01 per unit of risk. If you would invest 1,409 in AMG Advanced Metallurgical on September 4, 2024 and sell it today you would earn a total of 62.00 from holding AMG Advanced Metallurgical or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Antofagasta PLC
Performance |
| Timeline |
| AMG Advanced Metallu |
| Antofagasta PLC |
AMG Advanced and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Antofagasta PLC
The main advantage of trading using opposite AMG Advanced and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Antofagasta 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| AMG Advanced vs. Coor Service Management | AMG Advanced vs. Telecom Italia SpA | AMG Advanced vs. Zoom Video Communications | AMG Advanced vs. Vulcan Materials Co |
| Antofagasta PLC vs. AMG Advanced Metallurgical | Antofagasta PLC vs. GoldMining | Antofagasta PLC vs. Zinc Media Group | Antofagasta PLC vs. Lundin Mining Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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