Correlation Between ANGLO ASIAN and AWILCO DRILLING
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN and AWILCO DRILLING 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 ANGLO ASIAN and AWILCO DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and AWILCO DRILLING PLC, you can compare the effects of market volatilities on ANGLO ASIAN and AWILCO DRILLING 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 ANGLO ASIAN with a short position of AWILCO DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and AWILCO DRILLING.
Diversification Opportunities for ANGLO ASIAN and AWILCO DRILLING
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between ANGLO and AWILCO is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and AWILCO DRILLING PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AWILCO DRILLING PLC and ANGLO ASIAN 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 ANGLO ASIAN MINING are associated (or correlated) with AWILCO DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AWILCO DRILLING PLC has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and AWILCO DRILLING go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and AWILCO DRILLING
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 0.69 times more return on investment than AWILCO DRILLING. However, ANGLO ASIAN MINING is 1.45 times less risky than AWILCO DRILLING. It trades about 0.08 of its potential returns per unit of risk. AWILCO DRILLING PLC is currently generating about 0.05 per unit of risk. If you would invest 66.00 in ANGLO ASIAN MINING on October 16, 2024 and sell it today you would earn a total of 59.00 from holding ANGLO ASIAN MINING or generate 89.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. AWILCO DRILLING PLC
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| AWILCO DRILLING PLC |
ANGLO ASIAN and AWILCO DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and AWILCO DRILLING
The main advantage of trading using opposite ANGLO ASIAN and AWILCO DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN position performs unexpectedly, AWILCO DRILLING 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 AWILCO DRILLING will offset losses from the drop in AWILCO DRILLING's long position.| ANGLO ASIAN vs. Ameriprise Financial | ANGLO ASIAN vs. NEWELL RUBBERMAID | ANGLO ASIAN vs. United Insurance Holdings | ANGLO ASIAN vs. SUN LIFE FINANCIAL |
| AWILCO DRILLING vs. IDP EDUCATION LTD | AWILCO DRILLING vs. American Public Education | AWILCO DRILLING vs. Strategic Education | AWILCO DRILLING vs. GRUPO CARSO A1 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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