Correlation Between ANGLO ASIAN and AP Mller
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN and AP Mller 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 AP Mller 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 AP Mller , you can compare the effects of market volatilities on ANGLO ASIAN and AP Mller 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 AP Mller. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and AP Mller.
Diversification Opportunities for ANGLO ASIAN and AP Mller
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ANGLO and DP4B is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Mller 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 AP Mller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Mller has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and AP Mller go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and AP Mller
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 1.21 times more return on investment than AP Mller. However, ANGLO ASIAN is 1.21 times more volatile than AP Mller . It trades about -0.01 of its potential returns per unit of risk. AP Mller is currently generating about -0.42 per unit of risk. If you would invest 125.00 in ANGLO ASIAN MINING on October 25, 2024 and sell it today you would lose (1.00) from holding ANGLO ASIAN MINING or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. AP Mller
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| AP Mller |
ANGLO ASIAN and AP Mller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and AP Mller
The main advantage of trading using opposite ANGLO ASIAN and AP Mller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN position performs unexpectedly, AP Mller 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 AP Mller will offset losses from the drop in AP Mller's long position.| ANGLO ASIAN vs. BJs Restaurants | ANGLO ASIAN vs. Axway Software SA | ANGLO ASIAN vs. United Breweries Co | ANGLO ASIAN vs. SAN MIGUEL BREWERY |
| AP Mller vs. Addus HomeCare | AP Mller vs. Taylor Morrison Home | AP Mller vs. Axway Software SA | AP Mller vs. HOME DEPOT |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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