Correlation Between NEW MILLENNIUM and ANGLO ASIAN
Can any of the company-specific risk be diversified away by investing in both NEW MILLENNIUM and ANGLO ASIAN 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 NEW MILLENNIUM and ANGLO ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW MILLENNIUM IRON and ANGLO ASIAN MINING, you can compare the effects of market volatilities on NEW MILLENNIUM and ANGLO ASIAN 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 NEW MILLENNIUM with a short position of ANGLO ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW MILLENNIUM and ANGLO ASIAN.
Diversification Opportunities for NEW MILLENNIUM and ANGLO ASIAN
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEW and ANGLO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON and ANGLO ASIAN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLO ASIAN MINING and NEW MILLENNIUM 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 NEW MILLENNIUM IRON are associated (or correlated) with ANGLO ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLO ASIAN MINING has no effect on the direction of NEW MILLENNIUM i.e., NEW MILLENNIUM and ANGLO ASIAN go up and down completely randomly.
Pair Corralation between NEW MILLENNIUM and ANGLO ASIAN
Assuming the 90 days trading horizon NEW MILLENNIUM is expected to generate 1.62 times less return on investment than ANGLO ASIAN. But when comparing it to its historical volatility, NEW MILLENNIUM IRON is 1.11 times less risky than ANGLO ASIAN. It trades about 0.04 of its potential returns per unit of risk. ANGLO ASIAN MINING is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 126.00 in ANGLO ASIAN MINING on October 29, 2024 and sell it today you would earn a total of 3.00 from holding ANGLO ASIAN MINING or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW MILLENNIUM IRON vs. ANGLO ASIAN MINING
Performance |
| Timeline |
| NEW MILLENNIUM IRON |
| ANGLO ASIAN MINING |
NEW MILLENNIUM and ANGLO ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW MILLENNIUM and ANGLO ASIAN
The main advantage of trading using opposite NEW MILLENNIUM and ANGLO ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM position performs unexpectedly, ANGLO ASIAN 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 ANGLO ASIAN will offset losses from the drop in ANGLO ASIAN's long position.| NEW MILLENNIUM vs. Nucletron Electronic Aktiengesellschaft | NEW MILLENNIUM vs. PULSION Medical Systems | NEW MILLENNIUM vs. Genertec Universal Medical | NEW MILLENNIUM vs. CREO MEDICAL GRP |
| ANGLO ASIAN vs. CAL MAINE FOODS | ANGLO ASIAN vs. United Insurance Holdings | ANGLO ASIAN vs. United Natural Foods | ANGLO ASIAN vs. SENECA FOODS A |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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