Correlation Between ANGLO ASIAN and GEAR4MUSIC
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN and GEAR4MUSIC 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 GEAR4MUSIC 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 GEAR4MUSIC LS 10, you can compare the effects of market volatilities on ANGLO ASIAN and GEAR4MUSIC 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 GEAR4MUSIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and GEAR4MUSIC.
Diversification Opportunities for ANGLO ASIAN and GEAR4MUSIC
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ANGLO and GEAR4MUSIC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and GEAR4MUSIC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEAR4MUSIC LS 10 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 GEAR4MUSIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEAR4MUSIC LS 10 has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and GEAR4MUSIC go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and GEAR4MUSIC
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 0.69 times more return on investment than GEAR4MUSIC. However, ANGLO ASIAN MINING is 1.45 times less risky than GEAR4MUSIC. It trades about 0.13 of its potential returns per unit of risk. GEAR4MUSIC LS 10 is currently generating about -0.08 per unit of risk. If you would invest 122.00 in ANGLO ASIAN MINING on November 6, 2024 and sell it today you would earn a total of 8.00 from holding ANGLO ASIAN MINING or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. GEAR4MUSIC LS 10
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| GEAR4MUSIC LS 10 |
ANGLO ASIAN and GEAR4MUSIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and GEAR4MUSIC
The main advantage of trading using opposite ANGLO ASIAN and GEAR4MUSIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN position performs unexpectedly, GEAR4MUSIC 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 GEAR4MUSIC will offset losses from the drop in GEAR4MUSIC's long position.| ANGLO ASIAN vs. Air Transport Services | ANGLO ASIAN vs. BROADPEAK SA EO | ANGLO ASIAN vs. Sumitomo Rubber Industries | ANGLO ASIAN vs. Broadridge Financial Solutions |
| GEAR4MUSIC vs. Chengdu PUTIAN Telecommunications | GEAR4MUSIC vs. GREENX METALS LTD | GEAR4MUSIC vs. Comba Telecom Systems | GEAR4MUSIC vs. HUTCHISON TELECOMM |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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